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info@reason.org (Reason Foundation)http://www.pjdoland.com/chai/?v=0.1Air Traffic Control Newsletter #138http://www.reason.org/news/show/air-traffic-control-newsletter-138
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">Mixed messages on <span class="SpellE">NextGen</span> modernization</a></li>
<li><a href="#b">GAO updates and expands report on ATC transition</a></li>
<li><a href="#c">The battle between ADS-B and ADS-C</a></li>
<li><a href="#d">Why is AOPA still fighting against user fees?</a></li>
<li><a href="#e">Why PASS should reconsider ATC corporatization</a></li>
<li><a href="#f">News Notes</a></li>
<li><a href="#g">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>Mixed Messages on <span class="SpellE">NextGen</span> Modernization</strong></p>
<p>The message from FAA officials at the Air Traffic Control Association's annual conference in October was very upbeat. Air Traffic Organization COO Teri Bristol said, "We're making great progress on many <span class="GramE">fronts.</span> . . . We're improving NAS [National Airspace System] performance, we're delivering benefits through <span class="SpellE">NextGen</span>, and we're integrating drones and rockets in the airspace system." In technical sessions, Assistant Administrator for <span class="SpellE">NextGen</span> Jim Eck acknowledged that FAA is concerned about negative publicity: "There's just not a recognition of some of the accelerated things that have been happening."</p>
<p>I was impressed by reports of progress at some of the technical sessions, such as accelerated implementation of <span class="SpellE">DataComm</span> at dozens of airports. At another session we were told that FAA has recently updated its business case for <span class="SpellE">NextGen</span>, which concluded that the benefits by 2030 <span class="GramE">will</span> total $160.6 billion at an agency-plus-industry cost of $35.8 billion, which&mdash;after discounting to net present value&mdash;yields a benefit/cost ratio of 3.0. Following the conference, I downloaded both the July 2016 business case update and the <em>PBN Navigation Strategy 2016</em>. Maybe I've been too critical of FAA, I thought.</p>
<p>Alas, then came the dawn. In November both the Government Accountability Office (GAO) and the DOT Office of Inspector General (OIG) released new reports on <span class="SpellE">NextGen</span> that call into serious question the picture painted at the ATCA Annual conference. In its report (GAO-17-241R), GAO was asked by Congress to identify (1) how much FAA has spent on <span class="SpellE">NextGen</span> since 2004, (2) when the agency expects <span class="SpellE">NexGen</span> to be completed, and (3) how much additional funding will be needed to complete this modernization. GAO found that while FAA's own projected <span class="SpellE">NextGen</span> costs have increased modestly to $20.6 billion (2007 through 2030), their estimated cost to the aviation industry to equip their planes has declined to $15.1 billion: hence, total cost by 2030 will be $35.7 billion (essentially the same number used in FAA's business case and benefit/cost analysis).</p>
<p>That sounds pretty good, until you dig into the report a bit deeper. It turns out that what FAA originally included in <span class="SpellE">NextGen</span> is not all included in the plan through 2030. GAO identified six transformational programs that are not in current plans or cost estimates, and &nbsp;"may be continually deferred, redefined, or never implemented." These six are:</p>
<ul type="disc">
<li>Automated conflict resolution;</li>
<li>Consolidated facilities;</li>
<li>High-altitude, high-performance airspace;</li>
<li>Dynamic airspace boundaries;</li>
<li>Consolidation of terminal and transition airspace procedures;</li>
<li>Staffed remote towers for large airports.</li>
</ul>
<p>These are changes that actually <em>would</em> transform how air traffic is managed, as opposed to replacing aging equipment (which is most of what is now being done under the rubric of <span class="SpellE">NextGen</span>).</p>
<p>The OIG report (AV-2017-009) focuses on six programs <em>within</em> the now-through-2030 <span class="SpellE">NextGen</span> plan that FAA has dubbed transformational. These six (ADS-B, SWIM, <span class="SpellE">DataComm</span>, NAS Voice System, Common Support Services/Weather, and Collaborative Air Traffic Management) are discussed in some detail. The report notes that "FAA has not fully identified the 'end-state' for any of the six programs," and does not know "how much these programs will ultimately cost, how long it will take to complete them, or what capabilities they will ultimately deliver." Their estimated cost through 2022 is $5.77 billion, but "cost and schedule risks remain due to a lack of final requirements and complex integration issues."</p>
<p>For example, as previous GAO and OIG reports have pointed out, the current ADS-B program only includes ADS-B/Out. Assuming that is fully implemented by 2020 as planned, this will provide benefits for controllers in terms of more-accurate real-time surveillance data than provided by radar. But benefits for aircraft operators&mdash;intended to be the large majority of ADS-B benefits&mdash;depend on the as-yet undefined and not-scheduled implementation of ADS-B/In. That would provide new information displays in the cockpit and would facilitate reduced in-trail separation, more efficient merging and spacing etc. ADS-B's planned Airport Surveillance capability is also on hold, and its future is in question.</p>
<p>To its credit, FAA has accelerated the schedule for its initial <span class="SpellE">DataComm</span> implementation, which provides for digital departure clearances at 57 large and medium airport towers. But most of the benefits will come from the eventual implementation of <span class="SpellE">DataComm</span> in high-altitude, en-route airspace, which is not due to begin on a modest scale until 2019. Implementing <span class="SpellE">DataComm</span> in terminal airspace is not planned at all.</p>
<p>And SWIM, though a great idea in principle (providing common, real-time information to all stakeholders) "has not gained traction within FAA" and is little-used by aircraft operators, since FAA "changed its approach and now expects airspace users to individually develop their own unique applications and interfaces" to make use of raw data provided by SWIM; the previous plan was that FAA would provide such information in ready-to-use format.</p>
<p>The OIG report concludes by <span class="GramE">stating that</span> "the transformational programs are now mostly air traffic infrastructure efforts, rather than projects that fundamentally change the way air traffic is managed." This was the conclusion reached in a May 2015 assessment by the National Research Council, as well.</p>
<p>Finally, there is a basic disconnect between the OIG report and the FAA's 2016 <span class="SpellE">NextGen</span> Business Case. OIG says the costs of <span class="SpellE">NextGen's</span> transformational programs are highly uncertain and their actual capabilities are still unknown. That means the benefits are also difficult to quantify. And that means it's hard to take seriously either the $35.8 billion cost or the $160.6 billion benefits estimated in the Business Case report.</p>
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<p><strong><a name="b"></a>GAO Updates and Expands Report on ATC Transition</strong></p>
<p>The Government Accountability Office in October released the final version of the report requested by the Democratic leadership of the House Transportation &amp; Infrastructure Committee. "Air Traffic Control: Experts' and Stakeholders' Views on Key Issues to Consider in a Potential Restructuring" (GAO-17-131) is an improvement over the preliminary report released in February. In addition to the 32 aviation experts interviewed for the earlier version, the final report also includes interviews with 20 aviation stakeholders on both sides of the ATC corporatization question. Overall, the report is more comprehensive and <span class="GramE">better-informed</span> by the experiences of ATC corporatization overseas.</p>
<p>There are still places where the report, based on some of the experts' and stakeholders' responses, implies that separating safety regulation from ATC service provision, devising a user-fee system, ensuring smooth employee transitions, and maintaining working relationships with the military are uniquely complex problems. And the report's authors reinforce this misperception here and there with statements such as:</p>
<ul type="disc">
<li>"Since 1987,<em> several countries</em> have shifted the responsibility for providing air traffic control services from national civil aviation authorities . . . to independent self-financed entities with either public or private ownership." [<span class="GramE">emphasis</span> added]</li>
<li>"<em>Many ANSPs</em> worldwide charge some type of user fees to recover their air navigation services costs." [<span class="GramE">emphasis</span> added]</li>
</ul>
<p>In fact, <em>more than 50 countries</em> have made this transition since 1987, and <em>they all charge user fees</em> to recover their capital as well as their operating costs. So there is a considerable amount of empirical data available on all the questions discussed in this report on transitions.</p>
<p>On the desirability of shifting the funding source from aviation taxes (paid to the Treasury) to ATC fees and charges (paid directly to the ANSP), the experts were nearly all in favor, citing good reasons. The 20 stakeholders were more divided, with eight favoring such fees, four against, and the rest undecided. One stakeholder made the incorrect assertion that a system to monitor air traffic and process fees "would have to be developed from scratch and would be difficult to do." In fact, as reported in this newsletter, three commercial systems already exist, available to any ANSP that prefers not to develop and operate its own fee-collection system.</p>
<p>An important addition to the final report, which was not included in the preliminary version, is that <span class="SpellE">Nav</span> Canada came up with a workable method for dealing with revenue decreases due to economic downturns. It created a reserve fund (called the Rate Stabilization Account) for this purpose, which has helped the company to avoid rate increases (except for a modest, short-term increase following 9/11) during nearly all of its 20 years in business thus far. In GAO's February preliminary report, dealing with such revenue decreases was presented as a problem in need of a solution. The final report acknowledges <span class="SpellE">Nav</span> Canada's proven solution.</p>
<p>Among the stakeholders, there were the expected concerns that some user categories might pay more in ATC fees than they currently pay in aviation taxes. That's true of business jets, but that <span class="GramE">concern was also raised by the stakeholder from the air cargo industry</span>. Rather than the ICAO standard weight-distance formula, this person argued for a distance-only charge "because cargo gets severely penalized with the ICAO-recommended weight-based charge." This could raise serious competitive questions between passenger planes carrying belly cargo (paying weight-distance) vs. all-cargo planes (paying weight-only fees). Also, if <span class="SpellE">Fedex</span> and UPS are paying ICAO-standard weight-distance fees everywhere else in the world, why should they pay lower ATC fees in U.S. airspace?&nbsp;</p>
<p>The final report is less confusing than the earlier version about how much of the FAA's budget comes from aviation excise taxes, and it suggests, via a stakeholder response, that some level of those taxes should continue in existence, to support continued Airport Improvement Program grants. But it also makes what I consider a foolish suggestion that some of the new ANSP's ATC fee revenue could be turned over to the FAA to fund AIP and safety regulation. AIP should continue to be funded by aviation excise taxes appropriated by Congress (they would not stand for anything else!), and <span class="GramE">FAA</span> as a safety regulator should be funded out of the general fund, like all the other federal safety regulators.</p>
<p>On the difficult question of whether the new ANSP should have to pay the government for the assets of the ATC system, the experts either said no, for good reasons, or said that this would depend on the organizational model of the ANSP: yes if it were for-profit, no if it were a government corporation, and split if it were a non-profit. Most of the aviation stakeholders declined to take a position on this question.</p>
<p>One other set of responses caused me to think that some stakeholders don't really understand what a self-funded, de-politicized ANSP is all about. On the question of facility consolidation, "several noted that political issues would continue to have an impact." Removing the ANSP from the federal budget process and making it self-supporting is intended to exempt it from political micro-management, such as a member of Congress intervening to prevent the closure of a facility in his or her district. If that kind of micro-management remains after corporatization, much of the intended benefit will be lost.</p>
<p>The report's careful assessment of transition issues will be valuable going forward, when Chairman Bill Shuster (R, PA) introduces a revised version of the ATC corporation plan next spring, when Congress begins work on FAA reauthorization. Shuster told the Associated Press November 18<sup>th</sup> "that he spoke to Trump about the idea several times both before and during the presidential election," and that "Trump likes the idea of spinning off air traffic control operations from the government and placing them under the control of a private, nonprofit corporation chartered by Congress."</p>
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<p><strong><a name="c"></a>The Battle Between ADS-B and ADS-C</strong></p>
<p>A high-stakes battle is under way between two similar-sounding surveillance technologies. ADS-B is the emerging global standard for ATC surveillance. It stands for automatic dependent surveillance&mdash;<em>broadcast</em>. That means a plane broadcasts its identity, direction, location etc. once per second (in domestic airspace) with built-in integrity and accuracy checks, <span class="GramE">the signal is picked up by either a ground station (now) or a satellite</span> (near-future), and it's transmitted to the relevant ANSP. ADS-B is mandated for the near future in most developed countries as an improved form of ATC surveillance compared with radar.</p>
<p>ADS-C stands for automatic dependent surveillance&mdash;<em>contract</em>. That means the signal is sent out only as specified in a contract with the ANSP. ADS-C began serious use in the 1980s as part of a major improvement for position reporting in oceanic airspace where there is no radar coverage. The 1980s-era Future Air Navigation System (FANS) combined every-15-minute position reports using ADS-C with an early form of controller-pilot-datalink, and became widely adopted for long oceanic routes.</p>
<p>The big question for the future is whether ADS-B will supplant FANS/ADS-C in oceanic airspace. <span class="SpellE">Nav</span> Canada and NATS are already employing ADS-B for the northern-most tracks across the North Atlantic, using ADS-B ground stations in places like Greenland and Iceland along the way. Once space-based ADS-B becomes operational, as planned in 2018, those ground stations would serve mostly as back-ups. There are no ground stations available for US-Asia or US-Australia routes across the Pacific, or for mid-Atlantic or south-Atlantic routes, either. There, FANS/ADS-C prevails. But space-based ADS-B would work on those routes, as well as polar routes.</p>
<p>The coming battle will be mostly over separation standards and costs&mdash;and who bears those costs. ADS-C communicates using a system developed by ARINC (now Rockwell) called ACARS. FAA currently pays a significant part of the cost for ADS-C via an ARINC contract using Inmarsat or high frequency (HF) radio data link. Most long-range aircraft are FANS-equipped, and therefore obtain their ADS-C service over ACARS. Rockwell charges per minute, and at current prices a six-hour flight with every <span class="GramE">15 minute</span> updates would incur about $40 in charges. Increasing the reporting rate just to once per minute would increase that to about $600. But that would still be far less frequent than space-based ADS-B's every-8-seconds updates or domestic ADS-B's once per second.</p>
<p>Separation standards in (non-radar) oceanic airspace have been very large historically, due to the uncertain location of each plane, the lack of either accuracy or integrity checks in the ADS-C message, and the well-known shortcomings of HF radio. FANS updates enabled ICAO and FAA to reduce in-trail separation for FANS-equipped aircraft from 80 nm to 30 nm in U.S. oceanic airspace. But FANS is installed mostly on wide-body long-haul aircraft. U.S. narrow-body jets lack FANS, and their airline operators are not inclined to spend the money to add that equipment and pay the communications charges.</p>
<p>Therefore, oceanic routes between places like New York and various island nations in the Caribbean must still use ancient "procedural" separation of 80 nm. The RTCA report on ATC problems in the Caribbean that I critiqued in the June issue of this newsletter called for reducing separation standards there to 50 nm&mdash;but only for FANS-equipped planes. Hence, the report was calling for continued dependence on ADS-C, despite recommending the addition of ADS-B ground stations in the Caribbean.</p>
<p>As I wrote then, and repeat now, a better solution for improved ATC in the Caribbean is space-based ADS-B. JetBlue and American, the largest U.S. carriers serving those markets, do so using narrow-body jets that will all <span class="GramE">be</span> ADS-B equipped as of 2020. With space-based ADS-B, that should make possible 30 nm separation on those routes, and eventually even the 15 nm separation now planned for the <span class="SpellE">Nav</span> Canada/NATS tracks on the North Atlantic.</p>
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<p><strong><a name="d"></a>Why Is AOPA Still Fighting "the Battle Against User Fees"?</strong></p>
<p>During the past 18 months of debate over proposed conversion of the FAA's Air Traffic Organization into a self-funded, stakeholder-governed ANSP, it's been refreshing that general aviation group AOPA has not campaigned against this reform. While insisting that it continues defending its members from having to pay fees for every ATC transaction, AOPA has largely held its fire, since the measure passed by the House Transportation &amp; Infrastructure Committee in February explicitly&mdash;<em>by statute</em>&mdash;prohibited charging transaction fees to general aviation. This position stands in stark contrast to the war being waged by business-jet group NBAA, which has assembled a coalition of small-city mayors and rural interests to battle an alleged takeover of the ATC system by the big four airlines that would supposedly reduce or eliminate ATC services to small towns and rural areas.</p>
<p>But when I opened the November issue of <em>AOPA Pilot</em>, I was surprised and dismayed to read Editor-in-Chief Thomas B. Haines' editorial, "Having a Fee-Stroke: Why the Battle Against User Fees Matters." In his usual well-written style, Haines recounted a recent European trip with a GA pilot friend. They encountered landing fees even at very small airports, mandatory airport handling fees at some airports, and ATC fees for an IFR trip from London to the south of France in a Beech Baron totaling $186 one-way. Haines also discussed nuisance-level ATC fees in New Zealand and charges for telephone weather briefings in Germany.</p>
<p>Clearly those fees and charges are real, and they definitely make GA flying more expensive in Europe than it is here (and make GA flying a smaller fraction of flight activity, as a result). But let's note two points that Haines did not make in his article. First, most of the European fees that he covered are <em>airport</em> charges, not ATC charges. Second, and even more important, the one country he ignored is Canada. That's a significant omission, for two reasons.</p>
<ul type="disc">
<li>First, Canada's corporatized ANSP, <span class="SpellE">NavCanada</span>, <em>does not charge transaction fees</em> to piston GA planes. They charge what amounts to an annual registration fee: C$68 for planes weighing less than 2 tons and C$227 for planes between 2 and 3 tons.</li>
<li>Second, the ATC corporation proposal championed by Rep. Bill Shuster (R, PA) and passed by the T&amp;I Committee in February is modeled explicitly on <span class="SpellE">Nav</span> Canada. Not only does it exempt piston GA from per-transaction fees; it does not even include a nominal annual fee like <span class="SpellE">Nav</span> Canada's.</li>
</ul>
<p>Most private pilots likely don't know either of the above facts, and AOPA is derelict in its duty to give them an accurate rendition of what is and is not being proposed for U.S. ATC. Most private pilots have probably heard NBAA's deceitful claims that the proposed U.S. ATC corporatization would harm general and business aviation and small-town and rural America. They have no way of knowing that no such adverse effects have occurred in Canada, over the 20 years of <span class="SpellE">Nav</span> Canada's highly successful existence.</p>
<p>AOPA has spent three decades or so defending its members against the specter of ruinously expensive user fees. No such fees are in sight, and the leading proposal for ATC reform would ban such fees by statute. Instead of misleading its members, it's time for AOPA to declare victory and work constructively to ensure that the 2017 version continues to protect its GA members.</p>
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<p><strong><a name="e"></a>Why PASS Should Reconsider ATC Corporatization</strong></p>
<p>Although controllers' union NATCA has been supportive of converting the Air Traffic Organization into a nonprofit corporation similar to <span class="SpellE">Nav</span> Canada, the other FAA unions have come out strongly against it. That's particularly the case for Professional Aviation Safety <span class="GramE">Specialists,</span> the AFL-CIO union that maintains over 71,000 pieces of ground-based equipment used 24/7 to provide ATC services. PASS is second only to NATCA in numbers of ATO employees, and their opposition has puzzled me for several years. Let me explain.</p>
<p>Over the past decade of budget difficulties, FAA's capital budget (Facilities &amp; Equipment, aka F&amp;E) has been roughly constant, which puts it today about $1 billion a year short of what it had been projected to be by now. As a result, not only has the funding for <span class="SpellE">NextGen</span> modernization been squeezed; so has funding to sustain its vast array of legacy facilities (aging towers, TRACONS, and centers) and equipment (aging VORs, DMEs, and radars).</p>
<p>One way FAA has coped with this dilemma is to acquire <span class="SpellE">NextGen</span> systems via long-term service contracts, rather than buying the equipment up-front, then owning, operating, and maintaining it. An early version of this was used for the FTI communications backbone some years ago. More recently, the major system procured this way was the nationwide network of ADS-B ground stations, awarded to ITT <span class="SpellE">Exelis</span> in 2007. <span class="SpellE">Exelis</span> purchased all the equipment, developed all the ground stations (which were declared operational in 2014) and will operate and maintain them through 2035, at a total cost now estimated at $4.5 billion (but spread out over 28 years). More recently, the <span class="SpellE">DataComm</span> procurement, won by Harris Corp., is being structured the same way.</p>
<p>Yet <span class="GramE">another such service contract has just been proposed&mdash;by Chris <span class="SpellE">Giacoponello</span> and John Kefaliotis</span> in an article in the Fall 2016 issue of <em>The Journal of Air Traffic Control</em>. Discussing the aged and technically obsolete ground equipment that the ATC system continues to rely on (VORs, radars, etc.), they explained why replacing this legacy hardware with state-of-the art equipment would significantly reduce operating and maintenance costs, energy consumption, etc. But because of the lack of funds in the F&amp;E budget, they suggested a service-based contracting approach for this large-scale equipment replacement. As with the ADS-B ground stations, the contractor would own, operate, and maintain these systems and would be paid service fees over a long enough time period to recover their up-front capital costs.</p>
<p>A significant side effect of this trend is to reduce the need for technicians on the ATO's payroll, such as those who constitute the bulk of PASS's membership. From a strategic perspective, this offers the prospect of a slow death spiral for the union under the FAA's organizational and funding status quo. Yet given that status quo, it's hard to see that the FAA has any other good option for replacing obsolete facilities and equipment in the time frame where this is required.</p>
<p>By contrast, self-funded ANSPs like <span class="SpellE">Nav</span> Canada, DFS, NATS, and <span class="SpellE">Airservices</span> Australia have their own revenue stream from the fees that airspace users pay directly to the ANSP as they use the system. That kind of revenue stream is bondable, which means that the ANSP can go to the bond market and raise billions of dollars in capital modernization funds to purchase state-of-the-art technology and build new, consolidated ATC facilities to replace aging towers, TRACONs, and centers. Under that model, the ANSP continues to own, operate, and maintain all of its facilities and equipment.</p>
<p>Wouldn't that be a brighter future for PASS than the downward trend of technicians inherent in expanded FAA use of service contracts for capital modernization? Perhaps PASS should take a more careful look at the alternatives facing it.</p>
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<p><strong><a name="f"></a>News Notes</strong></p>
<p><span class="GramE"><span style="text-decoration: underline;">Side-by-Side Remote Tower Test at Leesburg</span>.</span> The second phase of the Saab Sensis remote tower demonstration at the non-towered airport of <span class="GramE">Leesburg,</span> VA took place from October 11<sup>th</sup> to November 10<sup>th</sup>. During those weeks the company operated a mobile (conventional) control tower while controllers in the prototype remote tower did "shadow" work, tracking but not talking with aircraft using the airport. There is no word from FAA at this point about when they might decide that remote towers are a safe and effective means on managing traffic at small airports.</p>
<p><span class="GramE"><span style="text-decoration: underline;">Tokyo <span class="SpellE">Haneda</span> to Get GPS Landing System</span>.</span> NEC Corporation has signed a contract with Japanese ANSP JANS to install the country's first ground-based augmentation system (GBAS) at Tokyo's <span class="SpellE">Haneda</span> Airport. The contract also calls for installing a space-based augmentation system (SBAS) at the airport. JANS plans to install GBAS at other domestic airports in coming years.</p>
<p><span class="GramE"><span style="text-decoration: underline;">ADS-B/In Coming to Alaska Airlines</span>.</span> NASA has announced that its Langley Research Center will purchase and install ADS-B/In equipment in three Alaska Airlines 737-900ER aircraft. The purpose is to test a NASA-developed system called Traffic Aware Strategic Aircrew Requests (TASAR). It synthesizes data from several sources, including ADS-B/In, to suggest changes to a route or altitude that will reduce either flight time or fuel burn. The system will reside on electronic flight bags in the cockpit.</p>
<p><span style="text-decoration: underline;">Dutch and German ANSPs Purchase Common Center Automation</span>. Air Traffic Control of the Netherlands (LVNL) and Deutsche <span class="SpellE">Flugsicherung</span> (DFS) have signed contracts with <span class="SpellE">Indra</span> under which all their en-route centers (Amsterdam, Bremen, Karlsruhe, <span class="SpellE">Langen</span>, and Munich) will use the new <span class="SpellE">iTEC</span> Center Automation System (<span class="SpellE">iCAS</span>). The new automation system will be used for lower airspace managed by these centers. It is compatible with the <span class="SpellE">iCAS</span> already in use in the Karlsruhe Upper Airspace Control Center in Germany. DFS is one of the partners in the <span class="SpellE">iTEC</span> Alliance, along with the ANSPs of Lithuania, Norway, Poland, Spain, and the U.K.</p>
<p><span class="GramE"><span style="text-decoration: underline;">Space-Based ADS-B News</span>.</span> Space-based ADS-B provider <span class="SpellE">Aireon</span> on Nov. 16<sup>th</sup> announced that it has signed a Memorandum of Understanding with DFS, the German ANSP, to evaluate the business and safety case for using space-based ADS-B services in their airspace. In other news, the company announced the completion of site acceptance tests by the Irish Aviation Authority for receiving surveillance data from the satellite constellation. In addition to making use of <span class="SpellE">Aireon's</span> data in IAA's airspace, the ANSP will be the host agency for the planned <span class="SpellE">Aireon</span> ALERT system for global aircraft tracking.</p>
<p><span class="GramE"><span style="text-decoration: underline;">Argentina's New ANSP Investing in Upgrades</span>.</span> Only months into its existence as a self-supporting government ATC corporation, EANA has announced an initial $121 million investment program to upgrade its facilities and technology. Argentine air traffic control was provided by the military until 2007, at which point a Civil Aviation Administration was created, combining air safety regulation and ATC service provision in a civil-government agency. Earlier this year, EANA was separated from that CAA and converted into an ANSP supported by ATC fees and charges, consistent with ICAO recommended practices.</p>
<p><span style="text-decoration: underline;">ENAV Completes ATC Takeover at Military Airports</span>. On Nov. 10<sup>th</sup>, Italian ANSP ENAV took over, from the Italian Air Force, tower and approach control service at the Rimini Airport. This was the fifth such takeover in two years, with previous ones taking place at Rome <span class="SpellE">Ciampino</span>, Verona, Treviso, and <span class="SpellE">Brindisi</span>. ENAV's CEO Roberta <span class="SpellE">Neri</span> said the Rimini transition completes the program, under which ENAV has become the ATC provider at Italy's joint-use airports.</p>
<p><span style="text-decoration: underline;">Pacific Islands to Deploy ADS-B Surveillance</span>. The ANSPs of Kiribati, Samoa, Tonga, Tuvalu, and Vanuatu will deploy a common ADS-B surveillance system via eight ground stations, greatly increasing surveillance within these islands and surrounding oceanic airspace. The system will be supplied by <span class="SpellE">Indra</span>, which won an international competition.</p>
<p><span style="text-decoration: underline;">Update on Electronic Flight Strips</span>. John Morris of <span class="SpellE">Nav</span> Canada emailed to note that <span class="SpellE">Nav</span> Canada has installed its electronic flight strips in more countries than I stated in an article last issue. He attached a <span class="SpellE">NAVCANatm</span> Worldwide Project History document, including a map showing how many workstations they have provided to ANSPs worldwide. Customers whose systems include electronic flight strips, besides Canada itself, are Australia, Denmark, the Dutch Caribbean, India, Italy, UAE, and UK.</p>
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<p><strong><a name="g"></a>Quotable Quotes</strong></p>
<p>"Improving the air traffic management system by replacing a piece of equipment should no longer be celebrated, because it is an old measurement for yesterday's system. Today's systems are complex and interdependent. Technological improvement must be accompanied by complete integration efforts, including policy, procedures, and leveraging the system of systems. Therefore, a snapshot milestone of turning on a new piece of equipment fails to translate to performance improvements. The only measurements that should be celebrated are system-wide, long-standing performance improvements."<br /> &mdash;Neil Planzer, <span class="SpellE">PlanzerMcLean</span>, "System of Systems," <em>Air Traffic Management</em>, Quarter 2, 2016</p>
<p>"Airlines have spent the last 30 years automating their aircraft platforms with capabilities for time-based operations, and yet the ATC system remains heavily invested in manual mileage-based operations at the controller sector level. The lack of automated capabilities at the controller position hampers the integration of air-ground operations that could optimize future system efficiencies. One example of this point is time-based separation services offered at Heathrow that have increased airport operational throughput."<br /> &mdash;Gary Church, instructions to his panel members for the Air Traffic Control Association annual convention, October 2016</p>
<p>"The rush into modern ATM systems by the U.S. absolutely amazes us in less-developed parts of the world. Australia introduced a no-paper strip environment to the terminal and en-route environment with the commissioning of the TAAATS system in 1998. Australia's major airport towers are now also paperless since the introduction of the INTAS tower <span class="GramE">system.</span> . . . TAAATS also introduced ADS-C, CPDLC, and PDC into the Australian system. In the mid-1990s the FAA was offered the opportunity to lease a version of TAAATS for Oakland so they could support the ISPACG initiative. The offer was declined because the offered system was not from a U.S. company."<br /> &mdash;Mike Gahan, consultant, email to Robert Poole, Oct. 12, 2016</p>
<p>"Another option would be to allow the ANSPs to create alliances of the like-minded, rather than the like-bordered. Breaking away from the current charging regime might be a good idea, too. Let the ANSPs and the airlines work on pricing that reflects the value provided, with things like peak-period loadings and volume discounts. Let the ANSPs provide tailored solutions for their customers, rather than a one-size-fits-all offering. Unlike creating new FIRs, these suggestions call for liberalization of the current regulatory model. They do not require repudiating the concept of sovereignty. They would be a good, low-impact start. If, on the other hand, you merely want efficiency, why not look at encouraging consolidation? Finding commercial ways to join forces, based on economic considerations, rather than political ones, would deliver economies of scale."<br /> &mdash;Andrew Charlton, "The European Aviation Strategy: Back to a <span class="SpellE">FABless</span> Future?" <em>Aviation Intelligence Reporter</em>, October 2016</p>
<p>"[Air traffic management] with its conservative attitudes and high regulatory barriers has so far been rather resistant to new business models&mdash;although with encouraging signs in the tower ATS services market. However, technologies like Remote Tower and Virtual Center are breaking one of the biggest defenses&mdash;you no longer have to be 'local' to provide the service. Both remote tower and virtual centers allow an ANSP to offer services to anyone anywhere."<br /> &mdash;Paul <span class="SpellE">Ravenhill</span>, Think Research, in Aimee Turner, "Disruptive Influences," <em>Air Traffic Management, </em>Quarter 3, 2016</p>
<p><a href="#top">&raquo; return to top</a></p>1014725@http://www.reason.orgMon, 05 Dec 2016 09:00:00 ESTbob.poole@reason.org (Robert Poole)Annual Privatization Report 2016http://www.reason.org/news/show/annual-privatization-report-2016
<p>Now in its 29th year of publication, Reason Foundation's <em>Annual Privatization Report</em>&nbsp;is the world's longest running and most comprehensive report on privatization news, developments and trends.</p>
<p><em>Annual Privatization Report 2016</em>&nbsp;details the latest on privatization and government reform initiatives at all levels of government. The individual sections include:</p>
<ul>
<li><a href="http://reason.org/news/show/apr-2016-air-transportation" target="_blank">Air Transportation</a></li>
<li><a href="http://reason.org/news/show/apr-2016-surface-transportation" target="_blank">Surface Transportation</a></li>
<li><a href="http://reason.org/news/show/apr-2016-transportation-finance" target="_blank">Transportation Finance</a></li>
<li><a href="http://reason.org/news/show/apr-2016-education" target="_blank">Education</a></li>
<li><a href="http://reason.org/studies/show/apr-2016-federal-privatization" target="_blank">Federal Government Privatization</a></li>
<li><a href="http://reason.org/studies/show/apr-2016-local-privatization" target="_blank">Local Government Privatization</a></li>
<li><a href="http://reason.org/news/show/apr-2016-criminal-justice" target="_blank">Criminal Justice and Corrections</a></li>
<li>State Government Privatization (<em>COMING SOON</em>)</li>
</ul>
<p>Your comments on <em>Annual Privatization Report 2016</em> are important to us. Please feel free to contact us with questions, suggestions or for more information. For the most up-to-date information on the rapidly changing privatization world, please visit Reason's <a href="/areas/topic/privatization">privatization research archive</a>, and sign up for our monthly <a href="http://reason.org/newsletters/privgovreform/">Privatization &amp; Government Reform Newsletter</a>.</p>
<p>Leonard C. Gilroy, Editor<br />Director of Government Reform, Reason Foundation<br /><a href="mailto:leonard.gilroy&#64;reason.org">leonard.gilroy&#64;reason.org</a></p>1014576@http://www.reason.orgMon, 21 Nov 2016 00:00:00 ESTleonard.gilroy@reason.org (Leonard Gilroy)Air Traffic Control Newsletter #137http://www.reason.org/news/show/air-traffic-control-newsletter-137
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">Will an ATC corporation actually benefit airlines?</a></li>
<li><em><a href="#b">The Hill</a></em><a href="#b"> publishes debunked ATC reform claims</a></li>
<li><a href="#c">NextGen vision not being implemented&mdash;Inspector General</a></li>
<li><a href="#d">Controller strikes: Europe vs. the United States</a></li>
<li><a href="#e">Further perspective on electronic flight strips</a></li>
<li><a href="#f">Upcoming Event</a></li>
<li><a href="#g">News Notes</a></li>
<li><a href="#h">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>Will ATC Corporatization Actually Yield Benefits?</strong></p>
<p>Just days after the wrap-up of A4A's fourth annual Commercial Aviation Industry Summit, a bizarre headline on an opinion piece in <em>The Hill</em> asked whether ATC "privatization" is "a solution in search of a problem." That piece coincided with some aviation blog discussions along the lines of the old saw that airline delays are the fault of limited airport runway capacity, not a technically backward ATC system.</p>
<p>And indeed, airline speakers at the A4A event did cite the padding of airline block times that disguises the increases in flight times in recent decades, while pointing to an inadequate ATC system as a cause. For example, JetBlue CEO Robin Hayes noted that the block time built into airline schedules today for New York-Washington flights is 80 minutes, compared to 60 minutes several decades ago. To be sure, since no new runways have been added at JFK, LGA, EWR, or DCA during this time period, while flight activity has increased, today's longer scheduled flight times do reflect runway limitations.</p>
<p>But runway "capacity" is not an absolute. For example, better technology and procedures introduced by NATS for time-based separation (TBS) of flights on approach to Heathrow have increased the landing rate during strong headwinds from 32-38 per hour with conventional fixed spacing to 36-40 per hour using TBS. Even more dramatic is the potential recently demonstrated at SFO via a combination of RNP approaches and a GBAS (GPS-based) landing system. Based on recent tests, reported Guy Norris in <em>Aviation Week</em> (Sept. 12-25, 2016), "the system would enable aircraft to land at normal rates, even in low visibility" (when landing rates are typically cut in half). Yet for a variety of funding and cultural reasons, FAA has not made GBAS part of NextGen, and has made very slow progress implementing "real" RNP approaches that save time and fuel.</p>
<p>Corporatized NATS and Nav Canada in 2015 began implementing reduced lateral separation on their North Atlantic tracks, with the distance between parallel tracks reduced from one degree of latitude (60 nm) to one-half degree (30 nm). Phase 1 did this only for an initial pair of tracks, adding a third one between them. Phase 2, beginning early next year, will extend this to all North Atlantic tracks. The benefits to customers equipped with ADS-B and Controller-Pilot Data Link will be far more frequent access to the flight tracks with the best tailwinds (eastbound) or the least headwinds (westbound), saving time, fuel, and CO<sub>2</sub> emissions. Once Aireon's space-based ADS-B surveillance is available, <em>in-trail</em> separations will also be reduced, for further customer gains.</p>
<p>The connection between corporatization and these kinds of customer benefits should be obvious. A customer-focused organizational culture, better in-house technical skills, businesslike procurement, and reliable funding from ATC fees have been making these kinds of gains happen a lot faster at corporatized air navigation service providers (ANSPs) than is possible at FAA.</p>
<p>Thus, it is quite logical that airline CEOs speaking at the A4A event vowed continued efforts to transform the FAA's Air Traffic Organization into a user-funded, stakehold-governed ANSP next year, when Congress returns to the FAA reauthorization issue. That's also why controllers' union president Paul Rinaldi and his NATCA colleagues continue to push for this kind of reform. As Rinaldi told summit attendees, "When I get to travel around the world and see what [equipment and technology] our counterparts are using&mdash;especially in Canada and the UK&mdash;you have to shake your head. We don't have the best equipment in the U.S."</p>
<p>And as reporter Michael Bruno noted in <em>Aviation Daily</em>, when Congress develops next year's FAA reauthorization bill, their September 30<sup>th</sup>, 2017 deadline is precisely when "sequestration budget cuts are scheduled to come back into full force." So don't look for any meaningful FAA funding increases in that reauthorization.</p>
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<p><strong><em><a name="b"></a>The Hill</em> Publishes Debunked ATC Reform Claims</strong></p>
<p>In an effort to be fair to both sides in the debate over ATC corporatization, <em>The Hill</em> on September 30<sup>th</sup> published an op-ed that repeated many previously-debunked claims against the idea put forth over the past year by opponent Delta Airlines.</p>
<p>Author R.W. Mann repeats opponents' misleading characterization of the plan as "privatization" in which Congress would "turn over control of the US ATC system to a private board dominated by representatives recommended by commercial airlines." It's not "privatization" in any of the usual senses of the word; it's a transformation of the existing ATO. Governance would be entrusted to a <em>13-member</em> stakeholder board, of which <em>only four</em> members would be recommended by airlines (who would be paying well over 90% of all fees and charges). That's hardly "domination."</p>
<p>The piece goes on to argue the position discussed in this newsletter's lead article that corporatization would not produce any benefits for airlines, since the real problems are either limited runway capacity or airlines' own lack of focus on on-time service. Mann points out that only Delta has invested in software to better manage flight punctuality, in effect giving away the store on Delta's effort to forestall reforms that would undercut its current competitive advantage.</p>
<p>But the piece's worst claims come straight out of Delta's discredited playbook:</p>
<ul type="disc">
<li>That Nav Canada's ATC services are more costly than those of the FAA, ignoring internationally recognized datasets&mdash;converted to US dollars&mdash;that show the opposite (see graph below).</li>
<li>That NATS was so badly run that it "required a bailout by UK taxpayers"&mdash;a distortion of the fact that 9/11 devastated UK air traffic only a few months after the corporatization of NATS and that each of its several owners (including the government) made additional equity investments to get it through the near-term aftermath.</li>
<li>That a UK commission found that there were "unambiguous signs of strain" on UK air service. That report was by the UK <em>Airports</em> Commission, and it was discussing the shortage of runway capacity in southeastern England. It had nothing whatsoever to do with ATC provider NATS.</li>
</ul>
<p><img src="http://reason.org/files/atc137-cost-per-ifr-hour-2014.jpg" alt="CANSO" width="400" name="Cost Per IFR Hour 2014" /></p>
<p>These claims have all been debunked in print before, in this newsletter and elsewhere. To repeat them at this juncture suggests that Delta and its friends have no real arguments against corporatization to put forward.</p>
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<p><strong><a name="c"></a>NextGen Vision Not Being Implemented&mdash;Inspector General</strong></p>
<p>In December 2004, DOT Secretary Norm Mineta and FAA Administrator Marion Blakey released the very ambitious <em>Next Generation Air Transportation System Integrated Plan</em>. Representing the views of seven federal agencies (including DOD and NASA), the report laid out a vision for transforming U.S. air transportation by 2025. There would be significantly expanded airport and ATC system capacity, increased safety, better security, and many other good things. The plan aimed to "virtually eliminate [airport] surface delays," give cockpit crews situational awareness of nearby aircraft, permit (in designated airspace) cooperative self-separation, provide for 4-dimensional flight path prediction, and achieve performance equivalent to that in <em>visual</em> meteorological conditions during <em>instrument</em> meteorological conditions. To coordinate the long-term R&amp;D among the various agencies involved, Congress approved creation of the Joint Planning &amp; Development Office (JPDO).</p>
<p>Well, that was then and this is now. The end-date of 2025 is just nine years away. How's that vision doing? The DOT Office of Inspector General (OIG) released a kind of status report on August 25<sup>th</sup>, "FAA Lacks a Clear Process for Identifying and Coordinating NextGen Long-Term Research and Development" (AV-2016-094). Its purpose was to assess what has happened since Congress, frustrated over FAA's failure to establish a clear role for the JPDO, terminated its funding in 2014. In response, FAA established its own Interagency Planning Office (IPO) to coordinate NextGen R&amp;D between FAA and other federal agencies. The OIG report acknowledges that FAA has made some progress, for example with IPO having defined six high-priority R&amp;D areas, for three of which NASA has the lead responsibility.</p>
<p>But the report goes on to discuss serious problems, such as:</p>
<ul type="disc">
<li>The six high-priority areas have not been validated by FAA's own Research, Engineering, and Development Committee (REDAC) or other outside experts.</li>
<li>FAA has not updated the nine-year old NextGen R&amp;D plan developed by JPDO in 2007.</li>
<li>The IPO is not addressing other potential high-priority R&amp;D areas previously identified by the JPDO that, if not pursued, "could materially affect the pace of NextGen in the longer term."</li>
</ul>
<p>But the most important paragraph in the entire report, which received zero media attention, is the following:</p>
<blockquote>
<p>"A longer-term vision is particularly important because the original vision for NextGen is not what is being implemented today. As the National Research Council (NRC) noted last year, NextGen has been redefined, and not all parts of FAA's original vision will be implemented in the foreseeable future. In addition, our work&mdash;and a 2014 MITRE assessment of NextGen progress&mdash;has shown that NextGen's success depends on FAA shifting from deploying infrastructure to transitioning new and enhanced operational capabilities into operational use."</p>
</blockquote>
<p>The question OIG does not address is why things have turned out this way. There are several reasons, not just one. First, some of what was laid out in the 2004 Integrated Plan was very likely unrealistic. Second, FAA's chronic funding woes led to understandable pressure from its aviation customers&mdash;acting through the NextGen Advisory Committee&mdash;to engage in a kind of triage, focusing what resources it has on near-term goals that would produce tangible gains. But the third reason stems from FAA's conservative bureaucratic culture.</p>
<p>I wrote a long report on this problem in 2014, commissioned by the Hudson Institute (<a href="http://reason.org/files/air_traffic_control_organization_innovation.pdf">http://reason.org/files/air_traffic_control_organization_innovation.pdf</a>). And since then I continue to receive emails from former FAA ATC experts, now in private industry, providing further documentation. Here is an example from a 36-year FAA veteran now in the private sector. "In 2014 I was involved in a major airspace redesign between Cleveland Center (ZOB) and Nav Canada. The two contractors working at ZOB would tell me regularly how decisive Nav Canada was and always on schedule. [Eventually] Nav Canada informed our people that if ZOB wasn't on schedule, they were making the changes anyway, which would have resulted in their new Q routes ending at the US/Canada border. Under that pressure, FAA somehow stayed on schedule."</p>
<p>Another example comes from the remote-tower pilot project in Leesburg, VA. "The FAA hierarchy changed the certification requirements three times in 15 months. As someone with over 50 years of ATC experience, I would not hesitate to certify this system with some minor tweaks. Unfortunately, there are no ATC types at FAA who have ever worked in a tower without radar, and therefore many thought this system was not adequate because they couldn't see a Cessna 172 three miles from the airport. I can certify that you can't see a C172 looking out tower cab windows either, at that distance, and it is not required." He concluded his memo to me, "I think that in almost all cases the overriding deterrent to innovation and modernization is that no one in the FAA bureaucracy wants to accept the risk for implementing new technology and procedures. The FAA's Safety Management System has surely had the unintended consequence of making a sluggish bureaucracy into one that can't act on even the most benign changes."</p>
<p>One of the main conclusions of my Hudson Institute study was that ATC reform requires more than just revamping the system's funding and governance. It also requires institutional reform that can create a less risk-averse and more innovative organizational culture. We see that culture at work in corporatized providers like Airways New Zealand, DFS, NATS, and Nav Canada. Depoliticization and separation of ATC provision from safety regulation are among the keys to bringing about this kind of culture change.</p>
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<p><strong><a name="d"></a>Controller Strikes: Europe vs. the United States</strong></p>
<p>U.S. airlines and their passengers have been well-served by the long-standing federal ban on strikes by air traffic controllers. Current law requires FAA controllers to take an oath that they will not break the law by going on strike, and we all know that President Reagan fired the striking PATCO controllers who refused his ultimatum to return to work on penalty of being fired.</p>
<p>Contrast the relative labor peace in U.S. air traffic control with the situation in Europe. Recent years have seen one strike after another, at both corporatized ANSPs and traditional government transport agencies. France has had something like 40 ATC strikes over the past decade alone. The only airline that has called for outlawing controller strikes is Ryanair, whose CEO Michael Leary last year launched an online petition drive for which he hopes to obtain one million signatures, calling on the European Commission to somehow override the labor laws of several dozen European Union members. Almost as fanciful are recent calls from Airlines for Europe (A4E) to permit the ANSPs of other countries to provide replacement service in the airspace of a country whose controllers are on strike. So far A4E has not proposed how such a plan would be implemented (though if a Single European Sky was ever achieved, the consolidated facilities and consistent ATC procedures might make that technically possible).</p>
<p>The ATC corporation provisions of the bill approved by the House Transportation &amp; Infrastructure Committee back in February are supposed to make controller strikes an illegal activity at the corporation, but the bill has been criticized by several conservative groups as not really doing that. The bill extends several provisions of 5 USC Chapter 71 to the ATC corporation; those are civil service provisions, but the corporation is clearly not intended to be covered by civil service regulations, so that is probably not the best way to implement the no-strike objective.</p>
<p>It would be wiser to include in the statute creating the corporation's federal charter explicit language that controllers are prohibited from striking. I asked NATCA President Paul Rinaldi about this, and he said that he and NATCA have no interest in gaining a right to strike and would be fine with such a provision. When I explained that to a conservative labor expert recently, the reply was to ask for specifics on how that would be enforced. So some further discussion on the details may be warranted. Another expert I talked with recently, who favors corporatization, pointed out that requiring the employees of a private, nonprofit corporation to take an oath would be contrary to private-sector practice. Perhaps a simple provision could be included in the corporate charter mandating that all controller contracts include no-strike language under which going on strike is grounds for employee dismissal.</p>
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<p><strong><a name="e"></a>Further Perspective on Electronic Flight Strips</strong></p>
<p>As many readers know by now, on July 6<sup>th</sup> FAA announced the winner of its competition to produce the Terminal Flight Data Manager (TFDM) system, which will finally replace paper flight strips with transferable electronic information on controllers' screens. Lockheed Martin was the winner, beating out Northrop/Nav Canada and Harris/Frequentis. The sad news is that full implementation of TFDM is expected to take 12 years.</p>
<p>Two readers of this newsletter contacted me last month to gently chide me for implying that FAA was virtually the last developed country to shift from paper to electronic flight strips. Paul Mayo of Frequentis noted that most ANSPs in Europe still use paper, as do nearly all in Asia and all of those in Africa. As of now, he wrote, only the Frequentis and Nav Canada systems are in regular use: the former's system in France, Hong Kong, Israel, and New Zealand and the latter in Australia, Canada, Denmark, Dubai, and Sweden. Several other vendors have installed systems that controllers do not use, because they are too distracting.</p>
<p>Another reader reminded me that FAA actually does have electronic flight strips in its three oceanic centers&mdash;ZNY, ZOA, and ZAN. The system, called Ocean 21, was adapted from a system developed for Airways New Zealand by CAE (which is no longer in the ATC business). The project to adapt and enhance it for Ocean 21 was called ATOP, adding radar interface and ADS-B support as well as a conflict probe. My informant (who asked not to be named) told me that the system has been in operation for 10 years now.</p>
<p>So in this limited portion of its ATC system, FAA was something of a pioneer in electronic flight strips, along with Airways New Zealand and Nav Canada. But with a growing number of ANSPs now equipped, and more in the near-term pipeline, it's still outrageous that the agency that thinks of itself as the world's best will not have systemwide electronic flight strips until more than a decade from now.</p>
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<p><strong><a name="f"></a>Upcoming Aviation Events</strong></p>
<p><em>Note: I do not have the space to list all aviation events that might be of interest to readers of this newsletter. Listed here are only those at which a Reason Foundation transportation researcher is speaking or moderating.</em></p>
<p><span style="text-decoration: underline;">Transportation Research Forum, DC Chapter</span>, Oct. 19, 2016, Old Ebbitt Grill, Washington, DC (Robert Poole speaking). Details at: <a href="http://www.trforum.org/chapters/washington">http://www.trforum.org/chapters/washington</a>.</p>
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<p><strong><a name="g"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">LFV and Saab Launch Remote Tower Company</span>. Sweden's corporatized air navigation service provider LFV and remote tower pioneer Saab have launched a joint venture company, called Saab Digital Air Traffic Solutions. The company, 59% owned by Saab, will design, build, sell, and certify remote towers anywhere in the world. Saab developed for LFV the world's first operational remote tower center, which has been in operation since April 2015 controlling traffic at the distant Ornskoldsvik Airport. Saab is also operating a demonstration project at the airport in Leesburg, VA.</p>
<p><span style="text-decoration: underline;">GlobalBeacon Announced by Aireon and FlightAware</span>. A private-sector response to ICAO's call for a Global Aeronautical Distress and Safety System (GADSS) was announced last month by space-based ADS-B company Aireon and flight tracking company FlightAware. Their GlobalBeacon service will offer continuous tracking worldwide, using Aireon's soon-to-be-launched global ADS-B satellite constellation and FlightAware's existing flight-tracking network. GADSS calls for routine tracking at least every 15 minutes in non-radar airspace, switching to one-minute updates only when in distress mode. But GlobalBeacon will offer continuous tracking all the time at one-minute updates.</p>
<p><span style="text-decoration: underline;">DFS Wins Edinburgh Tower Contract</span>. Germany's corporatized air navigation service provider DFS last month was announced as the winning bidder to provide control tower services at Edinburgh, Scotland&mdash;the sixth-largest UK airport. It was the second UK win for the control tower division of DFS, following its 2014 selection to provide tower services to Gatwick International Airport. The corporatized UK air navigation service provider, NATS, formerly held the Edinburgh tower contract.</p>
<p><span style="text-decoration: underline;">Multilateration Certified for Bratislava Airport, Slovakia</span>. The Slovak Republic's air navigation service provider, LPS, has received certification for a new multilateration (MLAT) airfield surveillance system for Stefanik Airport in Bratislava. Delivered and installed by Comsoft Solutions, the system is interfaced with LPS's nationwide ADS-B surveillance system. MLAT is updated more frequently than conventional secondary surveillance radar, resulting in more accurate real-time surveillance.</p>
<p><span style="text-decoration: underline;">ADS-B Coming to New Zealand Airspace in 2019</span>. All aircraft in controlled airspace above 24,500 feet in New Zealand Airspace must be equipped with ADS-B/Out by the end of December 2018. To prepare for this, the country's corporatized ANSP, Airways New Zealand, has awarded a contract to Thales to install a network of ADS-B ground stations, beginning early in 2017. New Zealand's mountainous terrain has limited radar surveillance, but the ADS-B system will fill in those gaps. Current plans call for expanding the requirement for ADS-B equipage to all lower altitudes by 2021, when the current radar system is to be decommissioned.</p>
<p><span style="text-decoration: underline;">Introduction to Remote Towers, <em>Scientific American</em></span>. Readers of <em>Scientific American</em>'s blog can get up to speed on the remote tower concept, thanks to a guest blog by aviation researcher Ashley Nunes. "Air Traffic Control without Towers" provides a good introduction to the subject for non-aviation readers. (<a href="https://blogs.scientificamerican.com/guest-blog/air-traffic-control-without-towers">https://blogs.scientificamerican.com/guest-blog/air-traffic-control-without-towers</a>)</p>
<p><span style="text-decoration: underline;">Seychelles Signs Up for Space-Based ADS-B Surveillance</span>. Aireon LLC has signed up a second ANSP customer in Africa. The Seychelles Civil Aviation Authority (SCAA) early this month announced a service contract (data service agreement) with Aireon covering the entire Seychelles Flight Information Region. Its 2.63 million square miles includes extensive oceanic airspace and borders the FIRs of India, Kenya, Madagascar, Mauritius, Somalia, and Tanzania. Aireon's first African customer is ATNS, the corporatized ANSP of South Africa.</p>
<p><span style="text-decoration: underline;">House Passes Bill for GPS Backup System</span>. On September 26<sup>th</sup>, the U.S. House passed unanimously a bill by Reps. John Garamendi (D, CA) and Duncan Hunter (R, CA). It requires the Coast Guard to develop an electronic successor to the legacy Loran system, called eLoran, as a backup to GPS for all civil and military uses. It would broadcast enhanced long-range signals from 19 towers around the country, providing overlapping fields to permit triangulation.</p>
<p><span style="text-decoration: underline;">ATC Commercialization Study to Change Websites</span>. The first comprehensive empirical study of before-and-after performance metrics of corporatized ANSPs, <em>Air Traffic Control Commercialization: Has It Been Effective?</em>, will no longer be available on the MBS Ottawa website after October 26<sup>th</sup>. MBS Ottawa carried out the study in conjunction with George Mason University, McGill University, and Syracuse University. (<a href="http://www.mbsottawa.com">www.mbsottawa.com</a>). After October 26<sup>th</sup>, it will still be available via the Social Science Research Network (<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1317450">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1317450</a>).</p>
<p><span style="text-decoration: underline;">Corrections to Last Month's Newsletter</span>. The report on issues involved in ATC reform/transition by the Government Accountability Office, discussed in last month's issue, was not a draft but was actually the finished product. The online version of last issue's newsletter has been corrected to reflect that, and the report is available on the GAO website as GAO-16-386R. Also, an alert reader noticed that the name of the Jeppesen company had been misspelled. Our apologies for both errors.</p>
<p><span style="text-decoration: underline;">NextGen Updates from FAA</span>. The library section of the FAA website (<a href="http://www.faa.gov/nextgen/library">http://www.faa.gov/nextgen/library</a>) includes four relatively new documents: Future of the NAS (summing up NextGen as envisioned to 2025), NextGen Implementation Plan 2016, NextGen Business Case 2016, and Chief NextGen Officer Report to Congress.</p>
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<p><strong><a name="h"></a>Quotable Quotes</strong></p>
<p>"It's past time to remove politics from air traffic control and put it under an independent, nonprofit organization funded entirely through user fees and with representation from all stakeholders, including airlines. This model has proven successful in more than 60 countries. It would allow the Federal Aviation Administration to focus on doing the job it does best: regulating safety." <br /> &mdash;Robin Hayes, CEO, JetBlue Airlines, "Antiquated Air Traffic Control Hurts New York Economy," <em>Crain's New York Business</em>, August 18, 2016</p>
<p>"NextGen needs a new path forward. Though America's ATC system is second to none, its technology is still stuck in the 1950s. NetGen is starting to change that, albeit in fits and starts. Some argue that changing the current funding and governance structure would hinder its progress&mdash;that's just nonsense! It is today's system that has hampered a more-timely and effective implementation of NextGen. It is telling that the National Air Traffic Controllers Association, which has a substantial stake in this debate, agrees the current status does not work. ATC reform would accelerate the progress in implementing NextGen with a more reliable source of funding while creating incentives to deliver projects on time and on budget." <br /> &mdash;Former Sen. Byron Dorgan, "5 Things You Need to Know about Air Traffic Control Reform," <em>The Hill</em>, Dec. 16, 2015</p>
<p>"Milestones marking technological implementation are key to [ATC] modernization, but turning on new technology is not the goal of NextGen and SESAR. Improving the safety and efficiency of air traffic management is the goal. . . . So our celebrations need to be focused on seeing operational improvements in the air traffic system&mdash;are we flying from one city to another faster than we were before, or using less fuel than we were before. Those are the milestones we should be marking." <br /> &mdash;Neil Planzer, Boeing, "System of Systems," <em>Air Traffic Management</em>, Quarter 2, 2016</p>
<p>"Having to do a slow-start on your capital projects every year due to Continuing Resolutions, facing occasional government shutdown, and having your overall capital budget constrained by spending caps makes it hard to implement multi-year, transformative capital programs like the FAA's NextGen air traffic control modernization. This is one reason why various legislators and blue-ribbon panels since 1987 have recommended various plans to separate the [ATO] from the rest of government and insulate them from the vicissitudes of the federal budget process." <br /> &mdash;Jeff Davis, "Government Stays Open Under CR, But on a Limited Basis," <em>Eno Transportation Weekly</em>, October 3, 2016</p>
<p>[Time-Based Separation] is just the start. When you put dynamic information in front of a controller, the potential is enormous. So we're now looking at mixed mode operations [at Heathrow]&mdash;arrivals and departures on the same runway. You need to have enough space for departures, but if you tell the tool the departure requirements, it can optimize arrivals. We estimate we can get two extra movements per hour from a single runway." <br /> &mdash;Andy Shand, "Time-Based Separation: Time to Take Control," <em>Airspace</em>, Quarter 3 2016</p>
<p><a href="#top">&raquo; return to top</a></p>1014655@http://www.reason.orgThu, 06 Oct 2016 19:00:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #136http://www.reason.org/news/show/air-traffic-control-newsletter-136
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">ATC reform goes mainstream</a></li>
<li><a href="#b">GAO on ATC transition issues</a></li>
<li><span class="SpellE"><a href="#c">Aireon</a></span><a href="#c"> close to first launch</a></li>
<li><a href="#d">GAO on Trust Fund shortfall</a></li>
<li><a href="#e">Progress on controller recruitment</a></li>
<li><a href="#f">News Notes</a></li>
<li><a href="#g">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>The ATC Reform Case Goes Mainstream</strong></p>
<p>August is normally a month when people go on vacation and don't pay much attention to public policy issues. But on the subject of reforming the U.S. ATC system, August saw two mainstream periodicals bring the reform case to ordinary thinking people. And they were followed up by more strong statements from aviation professionals.</p>
<p>Leading the general media effort was a long feature article in <em>Popular Mechanics</em>, "How to Fix Flying," part 1 of which was Chris Clarke's "Out of Air Traffic Control." The thrust of the piece was the truthful statement that "American air traffic control no longer has the most modern equipment, the most efficient aircraft routings, or the best technology." In solid journalistic fashion, Clarke dinged FAA for still relying on paper flight strips, voice radio, and 1950s-era radar and Instrument Landing Systems while just about everyone in the country uses GPS for navigation. He quoted one controller as lamenting, "Paper strips, pre-Commodore flight data input/output, landline communication from around the Apollo program era [at] one of the busiest approach controls in the <span class="GramE">world.</span> . . . This is what relying on Congress for funding does." Clarke ends up noting the global, ICAO-blessed practice of separating air safety regulation from ATC service provision, consolidating facilities (since "there's no reason air traffic could not be managed from anywhere"), and noting the Shuster bill ATC corporation that was approved by the House Transportation &amp; Infrastructure Committee in February.</p>
<p>One week later, <em>The Economist</em>'s "Difference Engine" blog carried a strong piece headlined "Antiquated Air Traffic Control Systems Are Becoming a Serious Threat to Safety: America Could Learn a Few Things from Canada." This article reviewed the global trend of countries corporatizing their ATC systems, making them self-supporting from service charges, like other utilities (and also having access to the bond market for major modernization projects). The article repeatedly contrasted the modernizations already implemented by nonprofit corporation <span class="SpellE">Nav</span> Canada with FAA's slow and painful progress under the rubric of <span class="SpellE">NextGen</span>.</p>
<p>In the third week of August, <em>Airport News</em> featured an article by former editor Joseph Alba, "Why Is the Leading Technological Country in the World Unable to Install a National Air Traffic Control System?" It covered much the same ground as the first two, but was addressed to a more aviation-knowledgeable audience. After discussing the success of <span class="SpellE">Nav</span> Canada in delivering electronic flight strips, controller-pilot datalink, and (soon to come) global ADS-B services via <span class="SpellE">Aireon</span>, he noted the support of the controllers' union for a corporatized system, adding that "Moving the operation to a corporation that would draw the revenue from user fees would free it from dependence on the instabilities of Congress."</p>
<p>Finally, <em>Aviation Daily</em> reported, during the last week of August, the presentation by NATCA President Paul Rinaldi at the Air Line Pilots Association Air Safety Forum that week. Rinaldi pointed out that despite FAA having implemented the costly ERAM system at all 20 en-route centers, "We still have to do 2.4 million manual handoffs a year with Canada"&mdash;essentially a phone call, whereas <span class="SpellE">Nav</span> Canada has the technology to do automated digital handoffs. "They're just waiting on us," Rinaldi said. He also said he finds it "kind of mind-boggling" that, unlike <span class="SpellE">Nav</span> Canada and numerous other ANSPs, the FAA is neither investing in nor subscribing to the forthcoming global space-based ADS-B service being offered by <span class="SpellE">Aireon</span>. "We need to assure a dedicated funding stream" for ATC, he told the ALPA attendees. "When you look at what most of the other civilized countries have done, they have pulled out the [ATC organization from government control] and they're thriving. . . . If we stay in status quo, we're going to struggle in the future."</p>
<p>Here are a few brief notes to amplify what these people have conveyed.</p>
<ul type="disc">
<li><em>Aviation Week</em> reported in mid-August that FAA has finally selected a contractor for the Terminal Flight Data Manager (TDFM) system that will bring electronic flight strips to all its ATC facilities. How soon? Well, the contract is 12 years long.</li>
<li><em>Professional Pilot</em>'s August issue included an article on FAA's progress with controller-pilot data link. Installation is under way on a single function&mdash;pre-departure clearance&mdash;at up to 35 airport towers by the end of 2016, with installations at other airports stretched out over many years. A chart in the article shows that initial en-route data link functions will begin to be implemented in 2019, but full en-route services won't start implementation until 2022.</li>
<li><em>Aviation Week</em> also pointed out, helpfully, that "congressionally imposed budget caps will return in 2018," unless Congress takes action to prevent the continuation of the long-term budget sequester.</li>
</ul>
<p>Can anybody still maintain, with a straight face, that the U.S. ATC status quo is acceptable?</p>
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<p><strong><a name="b"></a>GAO's Report on ATC Transition Issues</strong></p>
<p>Earlier this year the ranking Democrats on the House Transportation &amp; Infrastructure Committee and its Aviation Subcommittee&mdash;Rep. Peter DeFazio (D, OR) and Rick Larsen (D, OR)&mdash;requested the Government Accountability Office to review &ldquo;potential air traffic control restructuring issues.&rdquo; GAO&rsquo;s relatively brief report (GAO-16-386R) does a pretty good job of identifying and discussing the principal topics that must be addressed in serious restructuring, such as taking the Air Traffic Organization (ATO) out of FAA and setting it up as a self-supporting air navigation service provider (ANSP), as nearly all other developed countries have done. This is especially true of the discussions on asset valuation and on human capital and employee transitions.&nbsp;</p>
<p>There are portions of other sections that would benefit from additional information, or a somewhat different emphasis. For example, the discussion of FAA&rsquo;s budget is somewhat misleading. A statement in the text on p. 3 says that the percentage of FAA&rsquo;s Operations budget (85% of which is ATO operations) coming from user taxes (the Aviation Trust Fund) has averaged 60% over the years, with the balance coming from the general fund. This wrongly implies that a general-fund subsidy might be needed if the ATO were made separate. In fact, when I created a hypothetical self-funded ATO budget using numbers from the FY 2016 FAA budget, it looks like this:</p>
<p><span style="font-size: 11px;">:</span></p>
<table border="0" cellspacing="2" cellpadding="0">
<tbody>
<tr>
<td valign="top" width="24">&nbsp;</td>
<td valign="top" width="261">
<p>ATO operations</p>
</td>
<td valign="top" width="127">
<p style="text-align: right;" align="right">&nbsp;$7.5033</p>
</td>
<td valign="top" width="135">
<p>billion</p>
</td>
</tr>
<tr>
<td valign="top" width="24">&nbsp;</td>
<td valign="top" width="261">
<p><span class="SpellE">NextGen</span> operations/planning</p>
</td>
<td valign="top" width="127">
<p style="text-align: right;" align="right">&nbsp;&nbsp;&nbsp;&nbsp; .0601</p>
</td>
<td valign="top" width="135">&nbsp;</td>
</tr>
<tr>
<td valign="top" width="24">&nbsp;</td>
<td valign="top" width="261">
<p>Finance &amp; management</p>
</td>
<td valign="top" width="127">
<p style="text-align: right;" align="right">&nbsp;&nbsp;&nbsp; &nbsp;.7605</p>
</td>
<td valign="top" width="135">&nbsp;</td>
</tr>
<tr>
<td valign="top" width="24">&nbsp;</td>
<td valign="top" width="261">
<p>ATC facilities &amp; equipment</p>
</td>
<td valign="top" width="127">
<p style="text-align: right;" align="right">&nbsp; &nbsp;1.8322</p>
</td>
<td valign="top" width="135">&nbsp;</td>
</tr>
<tr>
<td valign="top" width="24">&nbsp;</td>
<td valign="top" width="261">
<p>F&amp;E mission support</p>
</td>
<td valign="top" width="127">
<p style="text-align: right;" align="right">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.2257</p>
</td>
<td valign="top" width="135">&nbsp;</td>
</tr>
<tr>
<td valign="top" width="24">&nbsp;</td>
<td valign="top" width="261">
<p>F&amp;E personnel &amp; related</p>
</td>
<td valign="top" width="127">
<p style="text-align: right;" align="right"><span style="text-decoration: underline;">&nbsp;&nbsp;&nbsp;&nbsp; .4700</span></p>
</td>
<td valign="top" width="135">&nbsp;</td>
</tr>
<tr>
<td valign="top" width="24">&nbsp;</td>
<td valign="top" width="261">
<p>Total Independent ATO</p>
</td>
<td valign="top" width="127">
<p style="text-align: right;" align="right">&nbsp;$11.3927</p>
</td>
<td valign="top" width="135">
<p>billion</p>
</td>
</tr>
</tbody>
</table>
<p>The remaining FAA includes all safety regulation, research &amp; development, miscellaneous functions such as commercial space transportation, etc., totaling $1.538 billion. Finally, the Airport Improvement Program, also funded by the Trust Fund, is $3.350 billion. On the revenue side, user taxes from the Trust Fund totaled $14.293 billion, and the general fund provided $1.9877 billion (12.2% of the total FAA budget). Therefore, if $11.4 billion of current user taxes were replaced by new ATC fees and charges, the independent ATO would be fully funded at its current level. That would leave nearly enough in residual aviation user taxes to fund AIP at its current level. And the $1.5 billion in general fund revenue would more than cover FAA&rsquo;s regulatory and miscellaneous functions. None of this context is explained in the GAO report.</p>
<p>The report&rsquo;s discussion of fixed versus variable costs (p. 4) is presented as if it were something new and unique to air traffic control, but exactly the same issues are faced in other public utilities (electricity, telecommunications, railroads), and solutions such as Ramsey pricing have long since been adopted to ensure that user revenues are sufficient to fully fund capital and operating costs. This discussion should have provided that context.</p>
<p>In discussing ATC user fees (p. 5), the report blandly states that &ldquo;non-commercial GA flights often use minimal ATC services and it may be difficult to track their use.&rdquo; This would be a good place to explain how Nav Canada has dealt with this, by charging piston GA planes a very modest annual registration fee rather than any transaction-based charges. But the term &ldquo;non-commercial GA flights&rdquo; also includes corporate jets, which use <em>all the same ATC services</em> as commercial airliners&mdash;and this point is ignored in the draft&rsquo;s discussion.</p>
<p>The section on mitigating economic and financial risks notes the one-time steps taken by NATS in the UK to cope with the post-9/11 downturn in air traffic and revenue, but ignores the far more important ongoing solution adopted by Nav Canada: a reserve fund, in which money is set aside to use during such downturns to prevent having to impose a rate increase at the very time when customers themselves have lower revenues.</p>
<p>Bizarrely, given that the whole point of serious ATC restructuring is to de-politicize the ATC system and change its culture (as later discussed on pp. 9-10), a sentence on page 9 asks &ldquo;whether the new entity&rsquo;s employees would be considered federal government employees.&rdquo; If an ATC reform ends up answering that question in the affirmative, the reform will be doomed to failure.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><span class="SpellE"><strong><a name="c"></a>Aireon</strong></span><strong> Close to First Launch for Space-Based ADS-B</strong></p>
<p>I have written a number of times about the game-changing nature of space-based ADS-B surveillance. It will make possible radar-like separation over the vast majority of the globe where there is either no radar coverage at all (oceans, polar regions), or inadequate coverage over large swathes of mountains and open country, especially in developing countries. The result will be a global leap forward in safer and more efficient air travel.</p>
<p>One of the most exciting examples is in southern Africa. <span class="SpellE">Aireon</span> has signed a Regional Commercialization Agreement with the ANSP of South Africa, ATNS. That ANSP, in turn, is part of a 15-country agreement to work together on air traffic control. Once the <span class="SpellE">Aireon</span> system is fully functional, in 2018, it will interface with the VSAT (very small aperture terminal) ground stations operated by ATNS to assist the ANSPs of the other 14 countries. This will bring radar-like surveillance data to the airspace of all 15 countries in southern Africa, where the current level of ATC services varies considerably.</p>
<p>Last month <span class="SpellE">Aireon</span> announced that the first launch, of 10 Iridium NEXT satellites including the ADS-B payload, would take place in late September, from Vandenberg Air Force Base on the California coast. The launch provider is <span class="SpellE">SpaceX</span>, and the launch vehicle is its Falcon 9. Alas, the loss of a Falcon 9 on the launch pad at Cape Canaveral on Sept. 1<sup>st</sup> may lead to a postponement of the launch from Vandenberg. As of Sept. 7<sup>th</sup>, <span class="SpellE">Aireon</span> tells me that they and Iridium are awaiting further word from Space X on whether there will be a launch delay. The 10-satellite payload has been mated to the dispenser, and the Falcon 9 is on the launch pad.</p>
<p><em>The Wall Street Journal</em> had an informative article on Iridium's replacement of its aging constellation with 81 Iridium NEXT satellites. The article noted that "FAA and industry officials are conducting a cost-benefit analysis" so that the agency can make a decision about signing up for <span class="SpellE">Aireon's</span> services. And reporter Andy <span class="SpellE">Pasztor</span> wrote that FAA's decision is expected sometime next year.</p>
<p>While we're awaiting these launches, let me recommend an outstanding read for those of you like me who are aviation/aerospace buffs. It's John Bloom's <em>Eccentric Orbits: The Iridium Story</em>, released this spring. It tells the inspiring story of a band of Motorola engineers coming up with the concept for a massive low-earth-orbit constellation of communications satellites, the subsequent development and launch of the network, and the failure of market demand to materialize at the prices Motorola had to charge given the huge development costs. Bloom then goes on to chronicle the amazing story of how former airline executive Dan <span class="SpellE">Colussy</span> struggled for a number of years to acquire the company out of bankruptcy, against the opposition of Motorola which sought to de-orbit all the satellites. The book has been on Amazon's top-20 business books list, and has received excellent reviews in media such as <em>The Economist</em> and <em>The Wall Street Journal</em>. Highly recommended.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="d"></a>GAO Finds Trust Fund Shorted of $1-2 Billion Over Past Decade</strong></p>
<p>The Aviation Trust Fund received between $1 billion and $2 billion less than aircraft purchasers of turbine fuel paid in fuel taxes from 2006 through 2015, according to an audit report from the Government Accountability Office released last month (GAO-16-746R). That finding helps explain the disparity between what business jet groups like NBAA claim their sector is paying and what FAA cost accounting shows as their contribution to the Trust Fund.</p>
<p>The problem came about because Congress sought to stop reported fraud in the early 2000s, after a 2001 study by KPMG found that more jet fuel was being produced than was apparently being consumer by owner/operators of turbine business aircraft. There were indications that jet fuel was being sold to diesel truck operators, because the tax on jet fuel was much lower than the tax on diesel fuel. In 2006, Congress changed the location where jet fuel was taxed and equalized the tax rates between the two fuels. However, because it wanted to retain a slightly lower tax rate for non-commercial jet fuel ($0.219/gal., rather than $0.244/gal.), Congress directed that dealers selling noncommercial jet fuel charge the $0.244 tax but apply for a refund of the difference. It also directed that the proceeds from the jet fuel tax be initially deposited into the <em>Highway</em> Trust Fund, with the Treasury to subsequently transfer the tax money to the Aviation Trust fund after evidence that it was legitimately being used as jet fuel. (Only Congress could concoct such a scheme!)</p>
<p>GAO found that following these changes, diversion of jet fuel to trucking virtually ceased. But it also found that many vendors of jet fuel did not bother to fill out the paperwork to reclaim the difference between the two tax rates. Therefore, the Highway Trust Fund over the 10-year period ended up with between $1 billion and $2 billion more than it was entitled to&mdash;and of course the Aviation Trust Fund was deprived of the same amount. (The disparity in amounts is due to differences between IRS data and FAA data, which itself should be a cause for worry.)</p>
<p>GAO did not address what difference this may have made in the amount that operators of business and general-aviation turbine aircraft paid into the Aviation Trust Fund during this period. I recall attending a Business Roundtable briefing in October 2014 at which GRA, Inc. presented detailed FAA data on the cost of various ATC services, the use of those services by various categories of aircraft operators, and the amount of aviation user tax revenue generated by each category. One of the surprising findings of that briefing was that non-commercial turbine fuel users (mostly business jets) paid only $64 million in jet fuel taxes in FY 2013. What happens if we recalculate that share, using what GAO learned about some of those payments never making it into the Aviation Trust Fund?</p>
<p>Using FY 2013 as a starting point, and taking the mid-point of GAO's estimates, the average annual shortfall from that segment of aviation would be $150 million ($1.5 billion divided by 10 years). Adding that to the reported $64 million yields $214 million, a much larger contribution. That amounts to 1.6% of total Trust Fund receipts for that year, rather than the measly 0.5% in the GRA briefing.</p>
<p>That's not the end of the story. The GRA briefing also used data from FAA's ETMS flight activity reports to determine what fraction of flight activity (and hence ATC workload) was represented by each segment of aviation. General aviation turbine represented 11% of ETMS flights in FY 2013. That's nearly <em>seven times</em> its (corrected) share of payments into the Trust Fund.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="e"></a>Some Progress on FAA Controller Recruitment</strong></p>
<p>For several years I've been reporting on the FAA's bizarre use of a Biographical Assessment to screen all applicants for controller positions. No matter how much ATC-related education, or past military ATC experience applicants had, if they failed to pass the BA (for undisclosed reasons), they were simply out of contention.</p>
<p>A bipartisan group of Members of Congress took up the case of these frozen-out applicants, and their efforts paid off, at least in part, in the FAA reauthorization bill enacted in July. First, the bill requires a permanent increase in the maximum age for new hires&mdash;from 30 before to 35 now. Second, it requires FAA to recruit 50% of new hires from those with ATC-related education or experience (i.e., former military or contract tower controllers and Collegiate Training Initiative graduates)&mdash;and exempts all of them from having to take and pass the BA. Unfortunately, the other 50% will be off-the-street candidates who must "pass" the BA in order to proceed further.</p>
<p>This compromise has not deflected an ongoing lawsuit by the Mountain States Legal Foundation arguing that use of the BA amounts to an effort to use race as a factor in selection. The class action lawsuit is representing CTI graduates who received high scores on the then-current FAA ATSAT (Air Traffic Selection and Training) exam, but were not considered, due to failing to pass the BA.</p>
<p>But there is one more piece of good news. Last month FAA announced the winner for a five-year contract to replace ATSAT with a better qualification/screening test. The winner is <span class="SpellE">SureSelect</span>, developed by the training subsidiary of Airways New Zealand and used in its various global ATC training service activities. This is the first time that FAA has chosen a test developed by a successful ANSP and used worldwide. As part of its competitive selection process, FAA carried out a validation study, and the results showed that those who performed well on <span class="SpellE">SureSelect</span> also perform well on controlling air traffic. This looks like a smart move on FAA's part.</p>
<p><a href="#top">&raquo; return to top</a></p>
<h2><span style="font-size: 12.0pt; font-family: 'Times New Roman';"><a name="f"></a>Keep the FAA's Head in the Clouds: Why the Agency Should Not Be Regulating Space</span></h2>
<p class="MsoBodyText"><em>Guest article by Rand Simberg, adjunct fellow, Competitive Enterprise Institute</em></p>
<p class="MsoBodyText">W<span lang="X-NONE">e are on the cusp of a new era in commercial <span class="GramE">spaceflight,</span> more ambitious than anything that has come before. There have been commercial communications satellites for decades, but now we are seeing a profusion of plans for commercial remote sensing, satellite Internet, and even &mdash; with a recent announcement of the planned launch of</span>orbital habitats in 2020 by Bigelow Aerospace&mdash;commercial lodging.<span lang="X-NONE"> But at this critical early moment, as these new space businesses are designing</span>,<span lang="X-NONE"> building</span>,<span lang="X-NONE"> and scheduling</span>&mdash;<span lang="X-NONE">and as they are seeking investors and customers</span>&mdash;<span lang="X-NONE">they now face a worrisome problem: regulatory uncertainty.</span></p>
<p class="MsoBodyText"><span lang="X-NONE">Why does this new industry need regulation at all? For one thing, there is growing recognition in Washington of </span>the<span lang="X-NONE"> need to regulate new commercial orbital activity in accordance with our national obligations under Article VI of the</span> Outer Space Treaty,<span lang="X-NONE"> which holds our government responsible for the country's activities in space, "whether such activities are carried on by governmental agencies or by non-governmental entities." In addition, much of the new commercial activity will occur in low Earth orbit, and will dramatically increase the number of objects there &mdash; meaning that there will be a higher possibility of collisions and a greater need for "space traffic control," a task today managed by the Joint Space Operations Center of the U.S. Air Force. If civilian firms start venturing into space, it will no longer be appropriate for the Air Force to handle this task by itself, and there are hints that the Air Force would like to hand off the role to another entity. It appears likely that this responsibility will be transferred to some other governmental agency. But which one?</span></p>
<p class="MsoBodyText"><span lang="X-NONE">The FAA's Office of Commercial Space Transportation (OCST) might at first seem like a good fit for the job. After all, OCST has been licensing American space launches for decades, and the FAA has maintained air traffic control in the United States for much longer than that. Accordingly, it might appear natural simply to extend its role from regulating flight in the atmosphere to regulating flight in the vacuum of space.</span></p>
<p class="MsoBodyText"><span lang="X-NONE">But it's not that simple. Space traffic control is not exactly analogous to air traffic control over sovereign territory, and the FAA is poorly suited for the challenges of regulating this new industry. Indeed, the agency's present involvement in licensing space launches is just an accident of history. In the early 1980s, as now, the commercial space-launch industry faced worrisome regulatory uncertainty &mdash; a problem solved with the passage of the Commercial Space Launch Act in 1984, which assigned the Department of Transportation responsibility for both regulating and promoting the industry. A new office within the department &mdash; OCST &mdash; was created to do this work. But in 1993, OCST was demoted</span>. A<span lang="X-NONE">s part of Vice President Al Gore's "streamlining government" initiative, it was folded <span class="GramE">into&nbsp; FAA</span> purely by executive action, and its head was made a civil-service position rather than a politically appointed one.</span></p>
<p class="MsoBodyText">T<span lang="X-NONE">his 1993 decision should be reversed</span>,<span lang="X-NONE"> and OCST should be detached from FAA, reporting instead directly to the Secretary of Transportation again. Doing so would elevate the importance of the office and therefore of commercial space, and give it more clout in annual budget battles. </span>In addition<span lang="X-NONE">, doing so would resolve a fundamental culture clash between FAA and OCST. As mentioned above, OCST is charged with both regulating and promoting the space-launch industry. But FAA sees itself strictly as a regulatory agency; it</span>s<span lang="X-NONE"> former role of promoting the airline industry was </span>removed by Congress <span lang="X-NONE">in the 1990s. Restoring OCST to its original location in </span>DOT<span lang="X-NONE"> would help ensure that </span>its<span lang="X-NONE"> industry-promoting work is not hampered by the FAA's current safety-first approach.</span></p>
<p class="MsoBodyText">In<span lang="X-NONE"> Congress, the </span>American Space Renaissance Act would take<span lang="X-NONE"> important first steps toward fixing some of the</span>se<span lang="X-NONE"> problems. Its sponsor, Rep</span>.<span lang="X-NONE"> James Bridenstine (R</span>, OK<span lang="X-NONE">), deserves praise for helping to start a public conversation about the kinds of reforms the moment calls for. </span>T<span lang="X-NONE">he bill would once again make the head of OCST a political appointee</span>, <span lang="X-NONE">elevat</span>ed<span lang="X-NONE"> to the rank of assistant secretary. And </span>it<span lang="X-NONE"> would prohibit the FAA</span>'s Air Traffic Organization<span lang="X-NONE"> from performing space traffic control. But the bill does not go far enough: it does not separate OCST </span>from<span lang="X-NONE"> the FAA. In debating the bill, Congress should restore&nbsp; OCST's independence of FAA.&nbsp;(This could also be done by </span>an <span lang="X-NONE">executive </span>order<span lang="X-NONE">, since the merger of OCST and FAA was originally an executive action.)</span></p>
<p class="MsoBodyText"><span lang="X-NONE">Yet even that </span>would be only<span lang="X-NONE"> a partial measure. OCST regulates only launch and entry, but there are many other activities that the new space businesses are planning to engage in &mdash; activities </span>in space<span lang="X-NONE"> that will not have anything to do with transportation <em>per se</em>. Future businesses may wish to undertake activities that aren't even anticipated today. Extending the regulatory reach of OCST to include all these activities is not as simple as it might seem. For example, should OCST &mdash; or any part of </span>DOT<span lang="X-NONE"> &mdash; be involved in overseeing alcohol or other intoxicant use on U.S. registered space vessels? What about gambling? What about firearms? And what <em>is</em> a U.S. registered vessel in this context? Who would register it? </span></p>
<p class="MsoBodyText">It is also hard<span lang="X-NONE"> to imagine any part of D</span>OT<span lang="X-NONE"> playing a productive role in space traffic control (including space situational awareness) in the statutory equivalent of international waters. Neither OCST nor any other part of </span>DOT<span lang="X-NONE"> should be entrusted to take over this responsibility from the Air Force: not only does the department lack the necessary expertise and equipment, but extending OCST's writ in this manner could dilute its ability to continue to carry out its critical launch-licensing functions.</span></p>
<p class="MsoBodyText"><span lang="X-NONE">A better regulatory approach would involve creating a new agency &mdash; one that can be both a uniformed service entrusted with high-level classified information <em>and</em> an agency relied on to carry out regulatory tasks in a user-friendly, transparent setting. Fortunately, we have such a model: the </span>U.S. <span lang="X-NONE">Coast Guard. As James C. Bennett</span> argued in <em>The New Atlantis</em> in 2011,<span lang="X-NONE"> a new U.S. Space Guard would be well suited to handle the diverse range of technical, regulatory, constabulary, and operational tasks up to and including space rescue, required as our nation moves seriously into space. Such an entity, with its own service academy, would also be more trusted to interact with related agencies of other nations (as the Coast Guard does) than either the Air Force or the FAA.</span></p>
<p class="MsoBodyText">C<span lang="X-NONE">reating a new agency to help regulate a major new field of human endeavor may seem an insurmountable challenge for our political system, which nowadays has trouble passing even routine legislation, and which seems capable of acting swiftly only in an emergency. But creating the Space Guard is, as Bennett argues, a practical, modest, and fiscally prudent solution to problems that will soon be on our doorstep, as part of a broader effort to retool our antiquated Cold War space policy for the </span>21<sup>st</sup> <span lang="X-NONE">century. The entrepreneurs and business leaders now working to create a future in space should encourage our policymakers to give this idea serious consideration.</span></p>
<p class="MsoBodyText"><em>A slightly longer version of this article appeared in the June 2015 issue of <span style="text-decoration: underline;">The New Atlantis</span>, and is reprinted here with their permission. </em></p>
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<p><strong><a name="g"></a>Upcoming Aviation Events</strong></p>
<p><em>Note: I do not have the space to list all aviation events that might be of interest to readers of this newsletter. Listed here are only those at which a Reason Foundation transportation researcher is speaking or moderating.</em></p>
<p><span style="text-decoration: underline;">Transportation Research Forum, DC Chapter</span>, Oct. 19, 2016, venue TBA, Washington, DC (Robert Poole speaking). Details at: <a href="http://www.trforum.org/chapters/washington">http://www.trforum.org/chapters/washington</a>.</p>
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<p><strong><a name="h"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">The Military and an ATC Corporation? No Big Deal</span>. Over the summer, Sen. Bill Nelson (R, FL) argued that the Defense Department would never go for a plan to corporatize the U.S ATC system. In a piece posted on the Reason Foundation website, I explained why civil-military cooperation and coordination, as exists in scores of countries with corporatized ANSPs, was likely to be the pattern in the United States as well. My supposition was confirmed by a well-informed Pentagon source who pointed out that it might well make sense for DoD to be represented on the ATC corporation's stakeholder board. (<a href="http://reason.org/blog/show/the-military-and-atc-corporation-no">http://reason.org/blog/show/the-military-and-atc-corporation-no</a>)</p>
<p><span style="text-decoration: underline;">Why Non-Aviation Users Need GPS Backup</span>. The aviation community, while recognizing the critical need for a reliable back-up system for GPS and its counterparts, is too often narrowly focused on solutions just for air navigation. An excellent article in <em>The Atlantic</em> by Dan Glass explains, in lay-person language, the numerous threats to GPS availability and the myriad user communities that rely on position, navigation, and timing signals provided by GPS&mdash;including nearly all financial transactions, telecommunications, seismic monitoring, truck routing, precision agriculture, etc. The piece makes a good case for a high-priority federal effort to implement at least an interim GPS backup capability in the near term. (<a href="http://www.theatlantic.com/technology/archive/2016/06/what-happens-if-GPS-fails/486824">http://www.theatlantic.com/technology/archive/2016/06/what-happens-if-GPS-fails/486824</a>)</p>
<p><span style="text-decoration: underline;">Argentina Separates Air Safety Regulation from ATC Provision</span>. Last month Argentina's new reformist government separated air traffic provider EANA from the country's Civil Aviation Administration (ANAC). The latter was created only in 2007; prior to that, the military ran air traffic control in Argentina. Under the new arrangement, ANAC will regulate the safety of ATC operations at arm's length from the new ANSP, as is done in most developed countries. EANA announced that it will invest $121 million in infrastructure and advanced technology, according to an Aug. 10<sup>th</sup> report by <em>Air Traffic Management</em>. Controllers at two large airports took part in a strike in early July to protest short staffing.</p>
<p><span style="text-decoration: underline;">Italian Government Divests 49% of ENAV</span>. The Italian Ministry of Economy and Finances sold 49% of ENAV, the Italian ANSP, on the Milan Stock Exchange late in July. Bids came from 31 Qualified Investors in Italy and 167 multinational investors from elsewhere. Total demand was for eight times as many shares as were offered. Based on the price paid during the initial public offering, ENAV was valued at approximately $2 billion.</p>
<p><span class="SpellE"><span style="text-decoration: underline;">Nav</span></span><span class="GramE"><span style="text-decoration: underline;"> Canada Board Approves Rate Decrease</span>.</span> On July 14<sup>th</sup>, the board of directors of <span class="SpellE">Nav</span> Canada formally approved the previously announced decrease in ATC user charges, averaging 7.6% across all users. The company estimates that the reduced rates will save its customers $77 million per year. The rates went into effect at the start of <span class="SpellE">Nav</span> Canada's new fiscal year, September 1<sup>st</sup>.</p>
<p><span style="text-decoration: underline;">Belfast City Airport Contracts Out Its Control Tower Services</span>. Airports in the United Kingdom are responsible for their own control towers, which they may either operate themselves (in accordance with national government safety regulations) or outsource to qualified control tower companies. Until this year, Belfast City Airport had self-provided tower services, but this year decided to outsource the function. Competing bids were submitted by Sweden's ANSP, LFV, and a division of U.K. ANSP, NATS. The latter was announced as the winner in mid-July. All current tower staff <span class="GramE">were</span> transferred to NATS as part of the contract.</p>
<p><span style="text-decoration: underline;">Free Route Airspace Expanding in Northern Europe</span>. The Borealis Alliance of nine northern European ANSPs plans to introduce Free Route Airspace (FRA) across their entire land and oceanic airspace by 2021, and recently received a $71 million grant from the European Union to assist with the transition. In some of the world's most complex and congested airspace, flights will be able to take shorter and more direct flight paths, saving time and fuel. The plan will permit FRA from the Baltic nations on the east, across the U.K. and Ireland, and extending to the eastern edge of Greenland.</p>
<p><span style="text-decoration: underline;">Myanmar Signs MOA with <span class="SpellE">Aireon</span> for Space-Based ADS-B</span>. <span class="SpellE">Aireon</span> announced in July that it has signed a Memorandum of Agreement with Myanmar's Department of Civil Aviation (DCA) to explore the benefits and costs of subscribing to <span class="SpellE">Aireon's</span> space-based ADS-B services. DCA's Yangon Flight Information region includes all of Myanmar's domestic airspace plus oceanic airspace. Singapore's ANSP has already signed a service contract with <span class="SpellE">Aireon</span>, and India's ANSP also has an MOA with the company.</p>
<p><span style="text-decoration: underline;">Airways NZ Teams with Aviation Australia on Controller Training</span>. The ANSP of New Zealand, Airways New Zealand, has announced an agreement to work with Aviation Australia, that country's largest aviation training provider. The two will develop and operate a new controller training academy in Brisbane. Airways will implement its <em>ab-initio</em> ATC training curriculum at the new facility. The company has other joint ventures for controller training in China, Dubai, and Puerto Rico.</p>
<p><span style="text-decoration: underline;">Philippines' First RNP Procedures Donated by U.S. Companies</span>. Honeywell and Hughes Aerospace have developed RNP arrival and departure procedures at <span class="SpellE">Tacloban</span> Airport, whose terminal and instrument landing systems were destroyed by Typhoon Haiyan in 2013. The companies donated the project, presumably to demonstrate the benefits that such procedures could offer to many other airports in this far-flung island nation. <em>Aviation Daily</em> (Aug. 3, 2016) noted that the Civil Aviation Authority of the Philippines "will likely target four or five other airports" for such improvements.</p>
<p><span class="SpellE"><span style="text-decoration: underline;">NextGen</span></span><span class="GramE"><span style="text-decoration: underline;"> for Airports</span>.</span> The Transportation Research Board recently published "Understanding the Airport's role in Performance-Based Navigation," denoted as Volume 1 in a series on <span class="SpellE">NextGen</span> for Airports. The report was developed as part of the Airport Cooperative Research Program and is obtainable via the TRB website as ACRP Report 150.</p>
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<p><strong><a name="i"></a>Quotable Quotes</strong></p>
<p>"In the mid-'80s, when I was at DOT and was the deputy secretary to Elizabeth Dole, we spent a couple of years convincing Congress that we should take National and Dulles airports, which at that time were departments of the FAA, and transfer them to a [new] regional authority. Congress at first was very reluctant to give up control of the DC airports, but the singular argument that convinced them was that those airports could then go the bond markets. If we hadn't been successful in convincing Congress of that, Dulles' main terminal would be half the size it is today, and Reagan National would still have as its main terminal what is now the A concourse, the oldest part of the facility."<br /> &mdash;Interview, "Former Transportation Secretary James <span class="SpellE">Burnley</span> on FAA Reauthorization," <em>Business Travel News</em>, Aug. 15, 2016</p>
<p>"Fits and starts in budgeting for modernizing air traffic control have resulted in technology that's outdated by the time it gets implemented. Our government has proven time and again that it can't plan for long-term capital improvements, and the result is a system that can't keep pace with the speed of technology. While our planes offer broadband Internet and live TV, they are guided by air traffic controllers using a system that dates back to the middle of last century. It makes no sense."<br /> &mdash;Robin Hayes, CEO of JetBlue, "Antiquated Air Traffic Control Hurts New York Economy," <em>Crain's New York Business</em>, Aug. 18, 2016</p>
<p>"Regardless of political considerations, ATC reform is essential for the future of our aviation system. Without it, we will sputter from piecemeal reform to piecemeal reform and achieve little. Only transformational reform&mdash;be it a nonprofit system or another innovative model&mdash;will allow the U.S. to efficiently and effectively deploy <span class="SpellE">NextGen</span> and reap the benefits of a modern ATC system. Canada has proven it can be done, and after 20 years they are a leader in innovation, efficiency, and safety. They have also just announced a 7.9 percent decrease in user fees, which means their user fees are now lower, in real terms, than when they were first enacted in 1999."<br /> &mdash;<span class="SpellE">Rui</span> Neiva, <span class="SpellE">Eno</span> Center for Transportation, "Time for an ATC Transformation?" <em>Politico,</em> July 25, 2016</p>
<p>"From a cost perspective, you'll experience roughly similar costs of operation as in the U.S., although fuel costs are slightly higher and navigation fees are applicable to all movements within Canadian airspace. 'Costs for operating in Canada are not too dissimilar from the U.S.,' says <span class="SpellE">Jeppeson</span> Technical Sales and Support Mgr. Nancy Pierce."<br /> &mdash;Grant McLaren, "Flying <span class="SpellE">Bizav</span> Aircraft into Canada," <em>Professional Pilot</em>, July 2016</p>
<p>"A few examples: the way the music industry matured away from physical formats; the speed with which telecommunications migrated from landline to digital; the readiness with which even former monopolistic power companies embraced competition and finally discovered customer service. All these industries recognized the value of using assets effectively, not just the cost of owning them. And yet many in our [ATC] industry cling to a belief that it could not happen here. By waving our safety&mdash;and essential service&mdash;flags, we tell ourselves that our 'natural monopoly' would be too dangerous to challenge. We can also find ourselves believing that flight information region boundaries are actual lines, or that control zones are set in something more substantial than vapor. The new entrants to our industry&mdash;unmanned aerial vehicles, high altitude balloons, satellites, rockets&mdash;do not operate to the same parameters, and are radically challenging our right as an industry to hide behind them."<br /> &mdash;Ed Sims, CEO of Airways New Zealand, "CANSO Chair Interview: Transformation Through Collaboration," <em>Airspace</em>, Quarter 3 2016</p>
<p><a href="#top">&raquo; return to top</a></p>1014622@http://www.reason.orgThu, 08 Sep 2016 20:31:00 EDTbob.poole@reason.org (Robert Poole)Privatization of Airports, Air Traffic Control and Airport Securityhttp://www.reason.org/news/show/apr-2016-air-transportation
Annual Privatization Report 2016 <p>The&nbsp;<em>Air Transportation</em>&nbsp;section of Reason Foundation's&nbsp;<a href="http://reason.org/news/show/annual-privatization-report-2016"><em>Annual Privatization Report 2016</em></a>&nbsp;provides an overview of the latest on privatization and public-private partnerships in air transportation. Subsections include:</p>
<p style="padding-left: 30px;">A. Airport Privatization</p>
<p style="padding-left: 30px;">B. U.S. Airport Security</p>
<p style="padding-left: 30px;">C. Air Traffic Control</p>
<p>&raquo; <a href="http://reason.org/files/apr-2016-air-transportation.pdf"><strong><em>Annual Privatization Report 2016: Air Transportation</em></strong></a> [pdf, 1.0 MB]</p>
<p>&raquo; Complete <a href="http://reason.org/news/show/annual-privatization-report-2016"><strong><em>Annual Privatization Report 2016</em></strong></a></p>1014577@http://www.reason.orgTue, 02 Aug 2016 00:00:00 EDTbob.poole@reason.org (Robert Poole)The Military and ATC Corporation? No Big Deal http://www.reason.org/blog/show/the-military-and-atc-corporation-no
<p>Sen. Bill Nelson (R, FL), an ideological opponent of converting the FAA&rsquo;s struggling Air Traffic Organization into a de-politicized, self-supporting ATC Corporation, has come up with a new argument against making this needed reform: &ldquo;the Defense Department will never go for it.&rdquo; This is despite the fact that DoD has not voiced any opposition to the bill approved earlier this year by the House Transportation &amp; Infrastructure Committee.</p>
<p>The Defense Department, to be sure, is a significant player in air traffic control. It operates 235 airports and heliports, shares 29 military airports with local governments (e.g., Albuquerque), and is a shared user (with active-duty military units) at three civil airports. As an ATC provider, DoD manages about 16% of U.S. airspace, employs over 8,000 air traffic controllers in one en-route center and 168 control towers, and maintains 438 navigational aids and 1,600 instrument approach procedures.&nbsp;</p>
<p>The House proposal to convert the ATO into the ATC Corporation provides continuity with this civil/military status quo. DoD personnel would continue to sit side-by-side with ATC Corporation personnel at the ATC System Command Center and other major facilities, just as they do today. Existing lines of communication for both day-to-day operations and national emergencies would also continue. The legislation also provides that in time of war, the President may temporarily transfer control over aspects of the ATC system to DoD, just as at present. A DoD member would occupy one of the seats on the new corporation&rsquo;s Advisory Board.&nbsp;</p>
<p>Nelson&rsquo;s argument seems to be aimed at people who have no idea about the wave of reform in ATC provision that&rsquo;s been under way worldwide since 1987. Since that date, more than 60 countries have converted their ATC systems from a government agency to a self-supporting corporate body supported by fees and charges. And guess what: every one of these 60 countries has a defense department that flies aircraft in the country&rsquo;s airspace!&nbsp;</p>
<p>Civil/military cooperation is standard practice worldwide, with little fuss or bother. And civil/military collaboration in some countries goes well beyond what exists here. For example:</p>
<ul>
<li>Australia is under way on a major effort to implement a single civil/military ATC software system called OneSKY, to replace both corporatized Airservices Australia&rsquo;s current Australian Advanced Air Traffic System (AAATS) and the current military system. Defence and Airservices are jointly funding and managing procurement of the new system. It will be phased in from 2018 to 2021.</li>
<li>Belgium might be the second country to merge civil and military ATC. Belgium&rsquo;s corporatized provider BelgoControl and the military&rsquo;s Belgian Air Component launched a joint study effort last year to explore full integration of the two systems, including the development of a business case.</li>
<li>The UK&rsquo;s for-profit NATS has a close working relationship with Defence Airspace and Air Traffic Management. At NATS&rsquo; Swanwick London Area and Terminal Control Center, military air traffic staffers are embedded throughout the operation.&nbsp;</li>
</ul>
<p>Every year, the U.S. Air Traffic Control Association (ATCA) hosts a global conference on civil/military ATC, with two days of presentations, workshops, and exhibits. The U.S. military ATC people who participate network with their counterparts from Australia, Canada, and Europe and people from those countries&rsquo; ATC corporations.&nbsp;</p>
<p>In short, active cooperation between ATC corporations and military ATC is well-established globally. In negotiating the final version of a corporatization bill, DoD will need to be involved, to ensure a smooth transition and a continuation of the long-standing cooperation between civil and military air traffic control.</p>1014562@http://www.reason.orgFri, 08 Jul 2016 09:48:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #135http://www.reason.org/news/show/air-traffic-control-newsletter-135
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">Delta distortions in <em>Wall Street Journal</em></a></li>
<li><a href="#b">Safety benefits of space-based surveillance</a></li>
<li><a href="#c">FAA's sole-source problem and STARS</a></li>
<li><a href="#d">Controller staffing reform gets bipartisan support</a></li>
<li><a href="#e">Crowd-sourcing weather data for aviation</a></li>
<li><a href="#f">News Notes</a></li>
<li><a href="#g">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>Delta Distortions in <em>Wall Street Journal</em> letter</strong></p>
<p>In response to a recent <em>Wall Street Journal</em> editorial supporting ATC corporatization along the lines of the House bill, Delta's Steve Dickson sent a letter that's a model of distorting facts in order to make its case. The thrust of the letter was two-fold: asserting that FAA is leading the world in advanced ATC technology and dismissing the world-leading performance of <span class="SpellE">Nav</span> Canada, whose non-profit model is the basis for the corporation proposal in the House bill.</p>
<p>Dickson's first claim was that, thanks to FAA progress, "more than 1.7 million aircraft are tracked daily using GPS." An expert on FAA operations data emailed me to cast doubt on that number, having no idea where Dickson could have gotten it. If true, it would mean about 621 million aircraft handled per year&mdash;yet FAA data for en-route airspace in FY 2015 totals about 42 million annual transactions (based on each transit of a center counting for three transactions: an arrival, a transit, and a departure). Dickson's fanciful total is aimed at grossly exaggerating the traffic volume in U.S. airspace&mdash;implicitly compared to 2<sup>nd</sup>-largest <span class="SpellE">Nav</span> Canada.</p>
<p>Second, he <span class="GramE">claims that</span> "FAA already delivers better results than other providers around the world." In my reply, which the <em>WSJ</em> published on June 30th, I cited objective data from CANSO on two critically important performance metrics. FAA's cost per IFR flight hour, at $450, is much higher than <span class="SpellE">Nav</span> Canada's $340 (both figures in U.S. dollars). And <span class="SpellE">Nav</span> Canada's controller productivity is also higher, achieving 1,760 flight hours per controller per year, compared with FAA's 1,725. Since it is <span class="GramE">well-known</span> that there are economies of scale in air traffic control, other things equal, the FAA as the world's largest provider should have significantly higher productivity and lower unit costs. Perhaps <span class="SpellE">Nav</span> Canada's world-leading automation technology has something to do with the difference.</p>
<p>Dickson also touts Delta's active participation in RTCA's <span class="SpellE">NextGen</span> Advisory Committee (NAC) to advise FAA on which modernization projects should get near-term priority. However, he fails to mention that at the June 18<sup>th</sup> NAC meeting, Delta <em>opposed</em> a proposal to create a working group on space-based ADS-B, an area where FAA is lagging woefully behind other ANSPs. Fortunately, the measure passed with the support of American, FedEx, and NATCA, despite Delta's opposition.</p>
<p>Finally, in the most egregious misrepresentation of all, Dickson wrote the following: "[<span class="GramE">U]<span class="SpellE">nder</span></span> the proposed House bill, travelers would continue paying taxes on airline tickets, in addition to paying new user fees," which he goes on to say would increase ATC costs by 20% to 29%. This is a classic propaganda trick. The House draft as of now still has no revenue title (which must come from the Ways &amp; Means Committee, not the authorizing committee that wrote the bill, Transportation &amp; Infrastructure). The clear intent of everyone supporting corporatization is that ATC fees would replace nearly all current aviation excise taxes, leaving only enough to pay for the airport grants program (AIP). So Dickson's statement, while technically true, is a gross distortion of reality.</p>
<p>The specter of increased ATC costs is a staple of anti-corporatization propaganda, including bizarre claims about <span class="SpellE">Nav</span> Canada rate increases during its 20-year history. The graph below, from the current issue of the company's newsletter <em>Direct Route</em>, shows that several rate increases <span class="GramE">were</span> imposed following the shrinkage of air travel after 9/11. But rates were subsequently reduced and are today far below the rate of consumer price inflation in Canada. Inflation has increased about 140% since 1999, when <span class="SpellE">Nav</span> Canada's initial ATC fees replaced the Canadian ticket tax. But the company's rates have increased just 5% over that same time period. And that is before the rate <em>decrease</em> announced recently for FY 2017 (indicated by the dashed lines on the graph). That would put the rates below the level they were at in 1999, in real terms. No evidence of cost increases there!</p>
<p><img src="http://reason.org/files/rate-history-to-fy-2018.jpg" alt="" width="450" height="292" /></p>
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<p><strong><a name="b"></a>New Report on Safety Benefits of Space-Based ADS-B</strong></p>
<p>The Flight Safety Foundation last month released its report, "Benefits Analysis of Space-Based ADS-B Technology." It provides a careful look at near-term, mid-term, and long-term benefits of this important improvement in global aviation surveillance.</p>
<p>The report identifies a number of aviation problems that space-based ADS-B will address, including the following:</p>
<ul type="disc">
<li><span style="text-decoration: underline;">Oceanic and remote airspace currently lacks surveillance.</span> Space-based ADS-B will provide near-real-time surveillance of all this airspace, functionally equivalent to radar, and will facilitate reducing separation minima in such airspace, thereby increasing capacity.</li>
<li><span style="text-decoration: underline;">Aircraft position errors, on or near boundaries of two different <span class="GramE">flight</span> information regions (FIRs), are still common.</span> Space-based ADS-B will "introduce significant safety benefits" by avoiding positional errors that now occur in such situations, and handovers from one FIR to the next should be more precise, reducing controller and pilot workload, while increasing safety.</li>
<li><span style="text-decoration: underline;">Current flight trajectory monitoring is generally once per 30 minutes in oceanic and remote airspace, leading to significant off-track errors.</span> Space-based ADS-B will change this to once every 8 seconds, permitting nearly real-time detection of aircraft not on predicted flight paths.</li>
<li><span class="GramE"><span style="text-decoration: underline;">ATC and pilot workloads are hampered by inefficient traffic management in oceanic and remote airspace</span></span><span style="text-decoration: underline;">.</span> Near-real-time surveillance will facilitate more efficient flight planning and better ATC tools, resulting in fewer errors.</li>
<li><span style="text-decoration: underline;">There is insufficient surveillance over designated conflict zones and volcanic ash clouds. </span>In such airspace, space-based ADS-B will permit better pre-planning and more accurate diversion routes, improving the global safety net.</li>
<li><span style="text-decoration: underline;">Locating black boxes after a crash can involve huge areas, leading to costly and time-consuming searches.</span> Space-based ADS-B will provide time-critical flight data to narrow the search area considerably.</li>
</ul>
<p>Progress toward implementing global space-based ADS-B continues. CANSO (the international association of ANSPs) released "Guidelines for Implementing ATS Surveillance Services Using Space-Based ADS-B" in March. ANSPs continue to sign Memoranda of Agreement with leading provider <span class="SpellE">Aireon</span>, to explore whether and how to implement space-based ADS-B within their airspace. <span class="SpellE">Aireon</span> announced on June 1<sup>st</sup> that Harris Corporation has completed production of all 81 ADS-B payloads to be launched on the Iridium Next satellite constellation beginning this year and continuing in 2017.</p>
<p>And benefits will begin soon thereafter. <span class="SpellE">Nav</span> Canada and NATS have announced that <span class="SpellE">Aireon</span> services will be implemented in the Gander Oceanic Control Area and the <span class="SpellE">Shanwick</span> OCA in 2018, which will enable longitudinal separation standard on their North Atlantic Tracks to be reduced from 40 nm to just 15 nm. That means many more planes will be able to use preferred altitudes that minimize fuel burn and GHG emissions.</p>
<p>Flight Safety Foundation vice president for global programs, Greg Marshall summed up the benefits of space-based ADS-B as follows: "The ability to provide near-real-time global surveillance is a game-changer for the aviation industry. This type of innovative capability comes along once in a generation. I think we can agree, it is always safer when the controller knows exactly where the plane is, 100 percent of the time."</p>
<p>I agree. Let's hope the FAA finally gets with the program.</p>
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<p><strong><a name="c"></a>FAA's Sole-Source Problem and STARS</strong></p>
<p>The DOT Inspector General issued a report on May 9<sup>th</sup> dinging the FAA for over-use of sole-source contracts (ZA-2016-065). In July 2009, the Office of Management &amp; Budget directed all federal agencies to reduce the use of non-competitive contracts, including sole-source ones. Of all DOT agencies, FAA awards far more such contracts than any other, amounting to 65% of all DOT sole-source awards. The IG's report finds that FAA fails to adhere to the standardized process for assessing potential follow-on contracts required by its Acquisition Management System (AMS). Between 2008 and 2014 FAA issued sole-source contracts totaling $2.4 billion. And the IG found that it did not even report to DOT 81 sole-source contracts during fiscal years 2012 through 2014.</p>
<p>But I searched in vain in this report for what is perhaps the most consequential sole-source decision FAA has made in recent years: Phase 3 of its Terminal Automation Modernization/Replacement program (TAMR). This is the over-budget and much-delayed procurement that is replacing the CARTS system with STARS at 11 of the country's largest TRACON facilities.</p>
<p>A highly knowledgeable informant sent me a detailed email about this. He <span class="GramE">noted that</span> "FAA spent billions of dollars to build a STARS/TAMR system to meet the requirements that CARTS already met." He also pointed out that FAA started down the path of a competitive procurement, but got diverted, as noted in a 2013 I.G. report that is eerily prescient about forthcoming problems: "FAA's Acquisition Strategy for Terminal Modernization Is at Risk for Cost Increases, Schedule Delays, and Performance Shortfalls" (AV-2013-097, May 29, 2013).</p>
<p>That report explains (p. 11) that FAA considered two alternatives for Phase 3. One was to replace CARTS with STARS at the 11 large TRACONs, at an estimated cost of $462 million. The other was to retain CARTS at the large TRACONs and to <em>replace STARS</em> at 52 Phase 1 sites with CARTS (estimated to cost $731 million). But the I.G. notes that this cost comparison omitted $270 million in costs needed to support computer and software upgrades to STARS in the first alternative&mdash;which would have made the costs equal. And the I.G. also notes that FAA did not even attempt to estimate the benefits of the two alternatives.</p>
<p>My informant believes that the situation the FAA faced at that juncture clearly merited a competitive procurement, in which the STARS and CARTS contractors could have each bid their system. The CARTS baseline, he wrote, "<span class="GramE">already</span> met the requirements, based on all the software changes needed to upgrade STARS to the same functionality as CARTS." And he maintains that since open competition is a fundamental principle of FAA's Acquisition Management System, the agency appears to have violated this principle by, in effect, cooking the books in favor of sole-source procurement of STARS for Phase 3. He also noted another difference: FAA owned unlimited data rights to CARTS, but the STARS contractor owns all data rights to STARS. That would certainly amount to a difference in benefits between the two alternatives.</p>
<p>This is yet another example, I'm afraid, that the FAA's organizational culture does not reflect the best interests of its customers.</p>
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<p><strong><a name="d"></a>Controller Staffing Reforms Urged at Hearing</strong></p>
<p>The House Aviation Subcommittee held a hearing on ATC staffing on June 6<sup>th</sup>. There was bipartisan agreement that (1) the <span class="GramE">controller staffing</span> situation is dire, and (2) hiring procedures need to be changed, including the ludicrous Biographical Assessment that FAA introduced in 2013.</p>
<p>Controllers' union NATCA President Paul Rinaldi told Members that the number of fully certified controllers is at a 27-year low, with a 10% decrease since 2011, as hiring and training failed to keep pace with retirements. Chairman Frank LoBiondo (R, NJ) pointed out that FAA has missed its controller hiring goals for the past six years (though may achieve it this year, according to Air Traffic Organization COO Teri Bristol). Ranking Member Rick Larsen (D, WA) stressed that some of the worst shortfalls of fully certified controllers are at high-traffic facilities.</p>
<p>There was considerable agreement among Democratic and Republican Members at the hearing that FAA's controller hiring and training system needs a lot of work. Matt Hampton, of the DOT Office of the Inspector General, cited the following shortcomings, based on recent OIG audits:</p>
<ul type="disc">
<li>FAA's model that estimates staffing requirements is not accurate;</li>
<li>Its system to optimize controller schedules is not fully utilized;</li>
<li>The agency lacks accurate data on likely upcoming controller retirements<span class="GramE">;</span> and.</li>
<li>There is poor communication about controller staffing needs between headquarters and ATC facilities around the country.</li>
</ul>
<p>There was considerable bipartisan criticism of FAA's introduction into the hiring process of a Biographical Assessment, beginning in 2013. Rep. Peter DeFazio (D, OR) was among many who urged much greater emphasis on recruiting former military and contract tower controllers, as well as graduates of Collegiate Training Initiative colleges, and exempting such candidates from having to pass any form of Biographical Assessment. He asked FAA Deputy Assistant Administrator for Human Resource Management Rickie Cannon what kind of sense it makes to reject an experienced military controller simply because he or she did not receive a passing score on the BA. Cannon gave a non-answer, saying only that (a) FAA does not want to screen anyone out and (b) the BA process is "producing results."</p>
<p>Rinaldi and former FAA Administrator Randy Babbitt expressed support for pending legislation (HR 5292) that would require FAA to give preference in hiring to former controllers and Collegiate Training Initiative graduates, who would be exempted from any Biographical Assessment; it would also require FAA to invite re-applications from CTI graduates previously excluded by not passing the BA. The bill appeared set for approval by the full Transportation &amp; Infrastructure Committee late in June, but consideration was deferred due to the gun-control sit-in that led to a shut-down of House business.</p>
<p>Several other interesting statements were made at the hearing. Former Administrator Babbitt, now with Southwest Airlines, supported corporatization of the Air Traffic Organization, as proposed in the pending AIRR Act. Babbitt joins all three former ATO chief operating officers in supporting corporatization (Russ Chew, Hank Krakowski, and David Grizzle), as well as former Administrator Langhorne Bond. And in response to a question about whether a corporatized ATC system would do better at recruiting and training controllers, OIG's Matt Hampton said it would take an ATC corporation time to get up to speed, but that such an entity, focused solely on ATC, would have a better chance of addressing such problems (per the account in <span class="SpellE"><em>Eno</em></span><em> Transportation Weekly</em>, June 23, 2016).</p>
<p>Rep. John Mica (R, FL), a former chairman of the subcommittee, proposed that FAA exit the controller training business (except for on-the-job training). Instead, it would shift more training to the CTI schools and then rely on hiring trained CTI graduates and former controllers, who would go straight to on-the-job training. This idea was raised in an OIG report in 2005 (AV-2006-021) and again in a GAO preliminary report in 2012 (GAO-12-996R). But as I reported in the February 2014 issue of this newsletter, GAO never completed the planned cost-effectiveness analysis, due to being told of FAA's plan to do a pilot-test of the idea&mdash;a test that was never carried out, due to the change in policy to introduce the Biographical Assessment.</p>
<p>While the changes proposed in HR 5292 would be a step in the right direction, implementing the OIG/GAO/Mica approach would be a more effective way to bypass FAA's social-engineering human resources staff. As would, of course, removing the Air Traffic Organization from the FAA.</p>
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<p><strong><a name="e"></a>Crowd-Sourced Weather for Aviation</strong></p>
<p>Six years ago in this newsletter I reported on then-new company <span class="SpellE">AirDat</span>, which had developed a disruptive innovation for aviation weather. Instead of relying on 20<sup>th</sup>-century weather balloons and ground-based radar for bits and pieces of weather data that would often be many hours old by the time aircraft were in flight, equip existing fleets with weather sensors and crowd-source weather data. <span class="SpellE">AirDat</span> sent the observations, in real-time via the Iridium satellite network, to its data center in Orlando, where it fed a suite of aviation weather models. By 2013 its TAMDAR system had proved itself, following a detailed evaluation using NOAA's NCEP 3-D weather model, finding that it improved forecast accuracy by 30-50% (and a 4-D model's accuracy was <span class="GramE">nearly</span> doubled).</p>
<p>In the three years since then, the idea has spread widely. First Panasonic bought <span class="SpellE">AirDat</span> and created subscription-based Panasonic Weather, enabling subscribing airlines and other aircraft operators to uplink detailed forecasts to their cockpits, via the system which is part of the company's Flight-Link offering. Since then, at least four other providers have moved into this market, offering (or planning to offer) subscription real-time weather information to airlines and other customers.</p>
<p>One of those is Weather Services International (WSI), whose largest customer is American Airlines. It has installed its Turbulence Auto <span class="SpellE">Pirep</span> System (TAPS) in close to a thousand aircraft, including those of American, Alaska, <span class="SpellE">Dragonair</span>, and several others. TAPS requires no new onboard equipment, but relies on software that is part of an aircraft condition-monitoring system. Data on ride quality are reported to WSI every 20 minutes over the plane's existing ACARS communication system. It is available on Boeing 737, 757, and 777 and the Airbus A319 and A321. Information on expected turbulence is then provided to all subscribers.</p>
<p>Honeywell is taking a different approach than Panasonic and WSI. It is relying on new software for its RDR-4000 aircraft weather radar that will downlink weather "snapshots" to the ground via broadband. Data from large numbers of equipped planes will be used to create detailed near-real-time pictures of airborne weather to be uplinked to aircraft via broadband. Honeywell plans a subscription weather product called Weather Information Service, starting next year. Rockwell Collins has developed similar software called <span class="SpellE">ThreatTrack</span> for its <span class="SpellE">Multiscan</span> weather radar, and is researching a broader system that would offer more comprehensive weather information to subscribing customers. It already provides non-radar crowd-sourced weather data via its Information Management Services division, the former ARINC. Also in the business is the National Center for Atmospheric Research (NCAR), with a software system called In Situ that also uses turbulence data. It is installed on portions of the fleet at Delta, Southwest, and United.</p>
<p>As I've followed these developments over the past six years, I often wonder where this leaves FAA's plans for things like a centralized <span class="SpellE">NextGen</span> Weather Processor (NWP) to generate better airborne weather data for airspace users. After years with no word about this proposed component of <span class="SpellE">NextGen</span>, last year I received a news release from Raytheon, headlined "Raytheon to Transform U.S. Aviation Weather." The company had just received a $77 million contract "to build weather processing and display infrastructure for use throughout the National Airspace System"&mdash;the <span class="SpellE">NextGen</span> Weather Processor. The news release referred to this as a very big deal, since "weather is the most disruptive factor in the NAS." Yet it seems to me that while FAA has dithered, the private sector&mdash;without need of FAA contracts&mdash;has been very busy with disruptive innovations in aviation weather.</p>
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<p><strong><a name="f"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">Remote Tower in Amsterdam</span><em>. Aviation Daily</em> reported (June 30<sup>th</sup>) that LVNL, the ANSP for the Netherlands, has installed remote tower capability at Amsterdam's Schiphol Airport to monitor its westernmost runway, rather than building an additional 20<sup>th</sup> century tower as done by FAA at O'Hare and DFW Airports. The tower at Schiphol is also now handling ATC duties at Groningen Airport <span class="SpellE">Eelde</span>, 200 km. away.</p>
<p><span style="text-decoration: underline;">FAA Offering ADS-B Rebates for General Aviation Planes</span>. Early last month the FAA announced that owners of small private planes <span class="GramE">will</span> be able to get $500 rebates on the cost of installing ADS-B/Out equipment on their aircraft. The agency will make these rebates available to 20,000 owners on a first-come/first-served basis. All aircraft operated in controlled airspace must be ADS-B equipped by 2020, but so far only about 18,000 such planes have been equipped.</p>
<p><span class="GramE"><span style="text-decoration: underline;">New CANSO Chairman from Airways New Zealand</span>.</span> At the 20<sup>th</sup> Annual General Meeting of the Civil Air Navigation Services Organization, the CEO of Airways New Zealand, Ed Sims, was elected to a five-year term as Chairman. The meeting, attended by over 220 delegates from ANSPs worldwide, took place in Vancouver, BC.</p>
<p><span style="text-decoration: underline;">Florida Chamber Backs ATC Corporation</span>. On July 1<sup>st</sup> the Florida Chamber of Commerce sent a letter to Congress, via Rep. Jeff Miller (R, FL), supporting the House FAA reauthorization bill, the AIRR <span class="GramE">Act, that includes converting the Air Traffic Organization into a self-supporting ATC Corporation</span>. The letter <span class="GramE">said that</span> "Reforms to our antiquated Air Traffic Control System are both overdue and necessary."</p>
<p><span class="SpellE"><span class="GramE"><span style="text-decoration: underline;">Aireon</span></span></span><span class="GramE"><span style="text-decoration: underline;"> Signs MOA with Russia for Space-Based ADS-B</span>.</span> Space-based ADS-B provider <span class="SpellE">Aireon</span> LLC has signed Memoranda of Agreement with two Russian organizations&mdash;JSC AZIMUT and JSC INFOCOM-<span class="SpellE">Avia</span> to evaluate the benefits of deploying space-based ADS-B in Russian airspace. AZMUT is a leading equipment supplier to the Russian ANSP, the State ATM Corporation. And INFOCOM is the designated provider of aviation information services in Russia. Russian airspace includes 26 million square kilometers, accounting for over 12.5% of the earth's surface.</p>
<p><span style="text-decoration: underline;">Three More ANSPs Plan to <span class="GramE">Join</span> <span class="SpellE">iTEC</span> Alliance</span>. Norway's <span class="SpellE">Avinor</span>, Lithuania's Oro <span class="SpellE">Navigacija</span>, and Poland's PANSA have applied to join the <span class="SpellE">iTEC</span> Alliance. <span class="SpellE"><span class="GramE">iTEC</span></span> is a collaboration of aerospace company <span class="SpellE">Indra</span> with the ANSPs of Germany, the Netherlands, Spain, and the UK to create and use a joint flight data processing system to enable advanced operations such as 4-D trajectory-based operations.</p>
<p><span class="SpellE"><span class="GramE"><span style="text-decoration: underline;">Fraport</span></span></span><span class="GramE"><span style="text-decoration: underline;"> Offering Incentives to Use GLS</span>.</span> <span class="SpellE"><span class="GramE">Fraport</span></span><span class="GramE"> Group, which operates Frankfurt Airport</span> (among others) was one of the world's first major airports to install a GPS-based landing system (GLS). Its Honeywell <span class="SpellE">SmartPath</span> system augments GPS signals from space to permit precision landings. Because only 8% of landings at Frankfurt currently use GLS, even though the capability is installed or latent on several thousand Airbus and Boeing aircraft, the airport will offer a $110 incentive (reduction of landing noise fees) for each such approach using a glide slope of 3.2% or greater. Steeper approaches reduce noise impacts on airport neighbors.</p>
<p><span style="text-decoration: underline;">Saab Researching Augmented Reality for Remote Towers</span>. Remote tower pioneer Saab is considering a virtual reality overlay system by which hazards such as birds or drones could be spotted and highlighted on display screens at remote tower centers.&nbsp; The system Saab is testing can identify potential problems the size of four pixels from 3,000 meters away. Other information overlays are also being considered for remote tower displays.</p>
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<p><strong><a name="g"></a>Quotable Quotes</strong></p>
<p>"The Shuster proposal isn't perfect, but it's the best opportunity in years to bring air travel into modern times. Passengers burn $17 billion a year from delays, cancellations, and missed connections, adding up to $30 billion in losses to the economy. Republicans have an opening, if they'll seize it, to allow private expertise to handle 24-hour airspace the government has proved inept at managing."<br /> &mdash;Editorial, "U.S. Air-Traffic Liberation, <em>The Wall Street Journal</em>, June 10, 2016</p>
<p>"It's the greatest system money can buy&mdash;during World War II&mdash;so it is vastly outdated. No one disagrees with that. I think where there is disagreement is how to move <span class="GramE">forward.</span> . . . Our country has been working for decades to try to modernize the system; it's not going to happen at the current pace. Our colleagues in the FAA are clearly to be applauded for the efforts they put forth&mdash;they're clearly making some progress&mdash;but we have a very, very long way to go, and as they admit, it's against very significant obstacles and odds toward making <span class="GramE">progress.</span> . . . It's a multi-billion-dollar effort confronting us and we need it now&mdash;not in 25 years."<br /> &mdash;Gary Kelly, quoted in Rebecca Lee, "Southwest CEO: U.S. Air Traffic Control System Needs Revamping," CBS News, June 22, 2016</p>
<p>"The point is the [ATC] system is an old concept. The idea of providing a heading, altitude, and speed is old-fashioned. Our industry is going to be disrupted, and we need to break with the old concept. The fact is that the rate of traffic growth is too high for human beings to be the solution. The goal certainly must not be to get rid of air traffic controllers, but rather to help them cope with the growth in traffic and ensure that their workload is manageable."<br /> &mdash;Paul <span class="SpellE">Riemens</span>, CANSO Chair, "A Fresh Perspective," <em>Airspace</em>, Quarter 2 2016</p>
<p>"<span class="SpellE">Aireon</span> embodies the early promise of <span class="SpellE">Nav</span> Canada&mdash;an organization with the flexibility to make strategic decisions in the interests of our customers. In this case, the investment in satellite-based surveillance promises to revolutionize the provision of air navigation services over the world's oceans and remote areas, with billions in fuel <span class="SpellE">savings</span> and equivalent GHG emission reductions."<br /> &mdash;Neil Wilson, CEO of Nav Canada, "President's Point of View," <em>Direct Route</em>, Spring 2016</p>
<p><a href="#top">&raquo; return to top</a></p>1014561@http://www.reason.orgThu, 07 Jul 2016 10:08:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #134http://www.reason.org/news/show/air-traffic-control-newsletter-134
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">What caused the May 26<sup>th</sup> LAX flight delays?</a></li>
<li><a href="#b">Fixing the ATC mess in the Caribbean</a></li>
<li><a href="#c">Remote towers continue to advance</a></li>
<li><a href="#d">More developments on GPS backup</a></li>
<li><a href="#e">Self-certification for small UAS</a></li>
<li><a href="#f">News Notes</a></li>
<li><a href="#g">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>What Caused the May 26<sup>th</sup> LAX Flight Delays?</strong></p>
<p>News reports on May 26<sup>th</sup> said that 145 flights into and out of LAX were delayed, and seven were cancelled, due to the FAA's imposition of a ground stop at 8 AM that day. That halt was lifted at 8:30, but delays in flights continued for much of the day. The only explanation offered was a "software glitch" at "a control center in San Diego." I decided to dig a little deeper to see what actually happened.</p>
<p>The facility in question was the Southern California TRACON in San Diego County. And the system that had the problem is STARS, the endlessly troubled replacement flight management software system for towers and TRACONs. <span class="GramE">STARS was</span> installed at this TRACON last year and was declared operational last summer. The failure that occurred on May 26<sup>th</sup> was a repeat of one that had occurred in January. A fix had been defined, but had not been installed by the date of this latest failure, so to get planes back in operation the TRACON reverted to an earlier software system.</p>
<p>The problem relates to the location of ATC radars in Southern California, with some portions of the airspace not fully visible due to radar reflections, etc. STARS has a fusion function which is supposed to combine data from several surveillance sources to compensate, but it appears less capable than the fusion function of the system it replaced, Common ARTS; the latter was able to cope with the radar shortcomings, whereas STARS currently cannot. The FAA is looking into possible fixes, including the implementation of a wide-area <span class="SpellE">multilateration</span> (WAM) capability in the region, to make the TRACON less reliant on radar signals. This is hardly unprecedented. FAA is installing a WAM system in Charlotte to deal with a similar problem of inadequate radar signals, and another is operational in Colorado.</p>
<p>This is just the latest problem in the long, troubled history of STARS. FAA began implementing the Standard Terminal Automation Replacement System 20 years ago, aiming to replace all 172 of the terminal systems in towers and TRACONs by 2005, at a contract price of $940 million. Because the system had been poorly specified, the program experienced delays and cost overruns, and by 2003 the cost had escalated to $1.69 billion. The following year FAA revamped the program into three phases, and renamed it Terminal Automation Modernization &amp; Replacement (TAMR), with a further increase in the price tag to $2.7 billion. But because of these delays, an interim replacement was deemed necessary at the larger sites. That system was named Common ARTS (CARTS), and was installed in Southern California TRACON, among others, where it worked reasonably well. But in 2010 FAA decided to proceed with STARS for the large facilities that had CARTS in operation. By the time that process is completed, the estimated total cost of TAMR will be in excess of $3.7 billion.</p>
<p>Yet as we've seen, STARS in the Southern California TRACON is performing less well than the interim system it replaced. To those who still maintain that FAA's modernization of the ATC system is going well, the troubled history of STARS stands out as an object lesson. As NATCA President Paul Rinaldi said at last month's Bipartisan Policy Center event, "We worked hard and have replaced the World War II vintage systems with 1990s systems." Meanwhile, <span class="SpellE">Nav</span> Canada is selling its highly cost-effective <span class="SpellE">NAVCANsuite</span> tower automation products (which, of course, include electronic flight strips) all over the world.</p>
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<p><strong><a name="b"></a>Fixing the ATC Mess in the Caribbean</strong></p>
<p>Several months ago a reader of this newsletter sent me a copy of a report from a task force of aviation advisory body RTCA called, "Recommendations to Improve Operations in the Caribbean," dated July 2015. It's an eye-opening discussion of a region with rapidly growing air traffic but obsolete airspace design and hopelessly outdated technology. (Example: to hand off a flight to the next Flight Information Region, controllers in the first FIR have to call their counterpart in the next FIR by dial-up phone). There is little radar coverage, so most of the over-water separation is "procedural," requiring up to 80 nm longitudinal (in-trail) separation between planes at a given altitude.</p>
<p>The report makes a number of recommendations, in the categories of improved infrastructure (communications, automation, surveillance), airspace redesign, and harmonized planning. The FAA operates two FIRs in the region: Miami Oceanic (ZMA) and San Juan CERAP (ZSU). They interface with New York Oceanic and with FIRs of Cuba, Haiti, Dominican Republic, Curacao, Venezuela, and Trinidad &amp; Tobago. FAA also provides ATC services for the Bahamas' airspace via an agreement with ICAO and delegation of control; the Bahamas' own ATC capabilities are quite limited.</p>
<p>You might expect San Juan (ZSU) would be a full-fledged Center, like ZMA, but it's not: it operates as an appendage of ZMA, lacking its own flight data processing and is not currently planned for inclusion in the roll-out of <span class="SpellE">DataComm</span>. This is nuts, and the report rightly calls for changing that orphan status.</p>
<p>Where the report really misses the target is in its call for improved surveillance. Yes, it does call for implementing ADS-B in the region&mdash;but only via adding ground stations. As for space-based ADS-B, its blithe dismissal reads, "While space-based ADS-B may have operational benefits in the future, it is an emerging technology with many technology, operational and policy questions. As such, the ERTG stands by its recommendation of implementing ground-based ADS-B in the region."</p>
<p>While it's true that the region has many islands on which ADS-B ground stations could be located, the report's cautious authors fail to appreciate the very real near-term benefits of space-based ADS-B, expected to be in full operation globally by 2018. As John Croft reported in <em>Aviation Week</em> (February 29-March 13, 2016), by that point ANSPs on the North Atlantic (NATS and <span class="SpellE">Nav</span> Canada) will be offering 15 nm in-trail separation, rather than the 30 nm separation those inbound aircraft will encounter when they transition to U.S. airspace. In its section on Caribbean airspace, the RTCA report calls for reduction in in-trail separation to 50 nm (from the current 80 nm that is standard in the region), based on using the dated ATOP automation platform currently used for west-coast oceanic airspace, as well as for New York oceanic airspace (ZNY). But this kind of "progress" would still leave the region grossly out of step with the 15 nm separations soon to be realized across the North Atlantic. And it would also require many financially strapped ANSPs in the region to invest in ground stations, buildings to house them, power connections, backup power in remote locations, and ongoing maintenance. Sources tell me that ATC infrastructure in this region routinely suffers from poor maintenance and very little logistical support.</p>
<p>So far, within the Caribbean only Curacao's ANSP has signed a 12-year data services agreement with <span class="SpellE">Aireon</span>, the space-based ADS-B provider. None of the others has even signed a Memorandum of Understanding to explore the specifics of how space-based ADS-B could be applied to their airspace. The FAA does have such an MOU, but has made no decision about whether or when to sign up. That may be why the RTCA report takes such a cautious position on the subject. But the Senate's FAA reauthorization bill would give FAA a strong push in that direction. It would require the agency to be able to use space-based ADS-B data for tactical aircraft separation over the oceans by 2018. And given the time needed for planning such efforts, that would mean signing a data services agreement this year. I hope this provision remains in whatever bill the House and Senate agree to pass.</p>
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<p><strong><a name="c"></a>Remote Towers Continue to Advance&mdash;Except Here</strong></p>
<p>According to the April issue of <em>Aviation Intelligence Reporter</em>, at the 2016 World ATM Congress in Madrid, "All anyone could talk about was remote towers." And it was not all hype, since a number of new developments were discussed.</p>
<p>The ANSP of Sweden, LFV, announced the signing of a letter of intent with the country's primary airport operator, Swedavia, to establish a remote tower center to serve five airports: Malmo, Visby, <span class="SpellE">Ostersund</span>, Umea, and Kiruna. The center would be located near LFV's ATC center at Stockholm's <span class="SpellE">Arlanda</span> Airport. If the study finds the concept feasible, the earliest implementation at the first of the five airports would be 2018-19.</p>
<p>The French ANSP&mdash;DSNA&mdash;has teamed with <span class="SpellE">Searidge</span> Technologies to develop a remote tower at Miquelon Airport and a remote tower center at Saint Pierre Airport, both on the French overseas island territory near Newfoundland. <span class="SpellE">Searidge</span> also is involved with several ongoing remote tower projects in Europe.</p>
<p>Hungary's <span class="SpellE">HungaroControl</span> is proceeding with its project with Thales and <span class="SpellE">Searidge</span> to develop a remote contingency tower for Budapest Airport, as well as a full-time remote tower to serve other Hungarian airports. Interestingly, Thales' approach differs from some others in not seeking to provide a full 360-degree camera view of the airport. Its ATC vice president Todd Donovan told <em>Aviation Week</em> that its approach calls for using video "where video makes sense."</p>
<p><span class="GramE">Another video approach is being pursued in Norway by ANSP <span class="SpellE">Avinor</span> and its contractor Kongsberg</span>. Instead of a suite of cameras to cover 360 degrees, Kongsberg provides a single rotating camera to capture near-real-time panoramic video. This is supplemented by a stabilized pan/tilt platform that can function as zoom-in binoculars for a controller. <span class="SpellE">Avinor</span> announced last fall that it is under way on a project to provide remote tower equipment at 15 lower-activity Norwegian airports, all managed from a remote tower center in Bodo. The first deployment is set for 2017. <span class="SpellE">Avinor's</span> aim is not to reduce ATC staff, but to centralize them in more-urban locations. The objective is to provide remote airports with better service at a lower cost.</p>
<p>These various projects include infrared as well as ordinary video cameras, to provide controllers with better visual surveillance in in rain, fog, snow, and at night&mdash;compared with 20<sup>th</sup>-century towers. From the United States comes a recent MITRE Corp. project to provide improved airport surveillance under low-visibility conditions using low-cost infrared cameras. Called Low-Cost Surface Awareness, it is intended to provide surveillance to prevent runway incursions at smaller airports that cannot afford the $20-25 million ASDE-X system. MITRE estimates that a commercial version of its LCSA would cost under $2 million. But LCSA could also be a building block for U.S. remote tower systems, if FAA ever gets around to developing them.</p>
<p>And speaking of U.S. towers, there has been a flurry of costly new FAA (20<sup>th</sup> century) tower projects recently. Chicago O'Hare's second tower cost $65 million, and its third cost an additional $45 million. <span class="GramE">Both were justified by FAA</span> because controllers at the original tower could not see all of the new runways added under the airport's runway expansion program. The new Las Vegas tower cost a cool $100 million, and the new SFO tower $77 million (plus $50 million to demolish the old tower). And May 30<sup>th</sup> saw the announcement of a replacement for Charlotte's 37-year-old tower, at a cost of $60 million.</p>
<p>There is not yet <span class="GramE">a rule of thumb for how much of the cost of a new 20<sup>th</sup> century tower could be saved by developing it as a remote tower instead</span>. Surely someone at FAA knows this . . . maybe? Or maybe it has not yet occurred to anyone there.</p>
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<p><strong><a name="d"></a>More Developments on GPS Backup</strong></p>
<p>On January 26<sup>th</sup> of this year, a software problem threw off the GPS network's coordinated universal timing message off by 13 microseconds, which affected the timing data on GPS's L-band signal and the time provided by GPS timing receivers. The widespread problem "disrupted user equipment globally . . . as the affected satellites traveled along their orbits," reported <em>Inside GNSS</em>, an industry publication. The "glitch" led to renewed calls for a global backup for the position, timing, and navigation functions of GPS and similar satellite systems.</p>
<p>In April, hundreds of South Korean fishing boats returned to port, after GPS jamming from North Korea caused them to be unable to locate their nets. In 2013 the U.S. Navy reported jamming of GPS signals on one of its ships sailing near Iranian territorial waters.</p>
<p>Interest in a reliable, global backup system for GPS is increasing, after a period in which previous plans seemed to have stalled. As I've reported previously, an inter-agency group coordinated by the U.S. Departments of Defense and Transportation concluded in 2008 that an electronic version of the legacy navigation system Loran would be the most cost-effective overall backup approach for position, navigation, and timing (PNT), and the agencies agreed to move forward with that approach. But that <span class="GramE">decision was suspended in 2010 by the Obama Administration, and the legacy Loran installations</span> were to be shut down. A similar effort to implement <span class="SpellE">eLoran</span> in Europe, led by Ireland and the UK, was terminated in 2015, when most other EU countries shut off their existing Loran-C transmitters.</p>
<p>But the lack of any plan for a comprehensive PNT backup has led to growing concerns in Congress. In 2014, Congress directed the Coast Guard to cease current activities of dismantling and disposing of legacy Loran infrastructure and sites, to preserve them for possible conversion to future <span class="SpellE">eLoran</span> sites. And in late 2015, in response to strenuous efforts led by Rep. John Garamendi (D, CA), the Deputy Secretaries of DOD and DOT informed members of Congress that the Administration was proceeding to develop a near-term solution to GPS vulnerability by establishing a complementary "timing-focused <span class="SpellE">eLoran</span> capability" as a prelude to a "full complementary PNT capability for the nation."</p>
<p>In March, the Norwegian Transport &amp; Communications ministry, in response to a request from the British government, agreed not to dismantle its Loran-C transmitters, so as to review with the UK the potential of repurposing those sites as part of a European <span class="SpellE">eLoran</span> network. And in May the South Korean government announced a contract to develop an <span class="SpellE">eLoran</span> system aimed at providing a backup alternative to GPS for PNT functions. The announcement came shortly after nearly a week of North Korean jamming that affected the signal reception of more than 1,000 planes and 700 ships. Reuters' story about the Korean effort noted that India and Russia are also looking into deployment of <span class="SpellE">eLoran</span> as a GNSS backup.</p>
<p>Several companies are working on PNT backup systems. The UK's <span class="SpellE">Chronos</span> and US's <span class="SpellE">UrsaNav</span> formed a joint venture company called <span class="SpellE">Taviga</span> last December, whose objective is to provide a commercially operated low-frequency PNT service. <span class="SpellE">Taviga's</span> current focus is on preserving the Loran-C sites in Europe and the United States as potential sites for a global <span class="SpellE">eLoran</span> system.</p>
<p>Iridium, the company whose satellite constellation will host <span class="SpellE">Aireon's</span> space-based ADS-B system, announced last month that it plans to offer a global Satellite Time and Location (STL) system, which it has developed with a company called <span class="SpellE">Satelles</span>. Users will be able to purchase an inexpensive microchip the size of a postage stamp to obtain PNT data anywhere on earth, via Iridium's 66-satellite constellation.</p>
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<p><strong><a name="e"></a>Self-Certification: A Safety Assurance Paradigm for Small UAS</strong></p>
<p><em>Guest article by Suzette Matthews, Washington Progress Group, LLC</em></p>
<p>Federal law charges the FAA with certifying the safety and airworthiness of aircraft and aircraft operators. FAA has long grappled with the problem of how to fulfill this responsibility while the numbers and sophistication of vehicles keep increasing, and at the same time federal budgets stagnate or decline. Historically, the agency has addressed this problem by leveraging aircraft manufacturer technical capabilities, enlisting the assistance of volunteer standard-setting organizations, and certifying private-sector experts to perform preparatory functions on the certification applicant's tab. But FAA has generally reserved to itself the ultimate authority to approve/disapprove all certification and safety decisions.</p>
<p>The projected proliferation and sophistication of unmanned aerial systems (UAS) threatens to overwhelm FAA's current safety certification and assurance capabilities, in terms of both human and financial resources. It is widely acknowledged that either the FAA must add significant staff and resources or some innovative safety certification and assurance paradigm must be devised to meet the UAS challenge.</p>
<p>In its April 1, 2016 Final Report, the FAA Micro-UAS Aviation Rulemaking Committee (ARC) takes the new paradigm approach, recommending that certification of small UAS be performed pretty much entirely by the private sector. The ARC proposes that the manufacturer be permitted to "self-certify" that its small UAS meets "industry consensus" safety standards "acceptable" to FAA for operations that fly over people. The ARC chose this alternative over (1) FAA certification of conformity with standards, or (2) mandated third-party certification (such as by an independent laboratory). Given federal laws making FAA the safety certifier of pilots, airframes, and aircraft operators, this self-certification approach challenges the status quo in at least two respects: (1) there is no stated assurance that the "industry consensus standards" would be independently validated and formally promulgated or approved by FAA, and (2) no FAA official would do the certifying.&nbsp;</p>
<p>Self-certification has precedent in other transportation modes&mdash;in fact, it's more the rule than the exception in the private sector generally. And it can effectively promote and assure safe practices. Although various federal and state agencies promulgate or approve industry standards addressing the most likely, significant, or egregious instances of risk or abuse, there is no comprehensive federal government certification or licensing system for the manufacture of most things the public uses every day. Injury or damage from most defective products is primarily&mdash;and pretty effectively&mdash;deterred and remedied through the legal liability (tort) system and related insurance industry. It can be argued that fear of lawsuits and financial liability for negligence, as well as coverage requirements and limitations imposed by insurance carriers, have produced a remarkably safe environment for consumers and provided a viable source of redress for those injured or damaged by defective products. In the case of aviation products, legal liability principles can be expected to be especially effective: "strict liability" versus "negligence" principles apply&mdash;that is, manufacturers and operators are liable for any loss or damage they cause, regardless of whether they acted negligently or with reasonable care.&nbsp;</p>
<p>For better or worse, however, when it comes to aviation it has been demonstrated time and again that the public trusts the FAA more than the private sector to protect its safety. The worst of all possible outcomes is the situation in which the public relies on a government safety watchdog that fails&mdash;or that lacks the will or resources&mdash;to do its job. If the private sector is going to assume the role of self-certifier, it should be explicit that FAA is deliberately not exercising its certification role with respect to the small UAS involved, but on the other hand, that manufacturers and operators are legally responsible for whatever damage or injury they cause. <em>This self-certification paradigm would be consistent with the regulatory construct FAA already applies to ultralight and light sport aircraft,</em> which might serve as a models.</p>
<p>To support tort liability as the safety assurance mechanism, registration of all UAS with FAA should be required from the point of original sale onward, and legal liability should adhere to the registered owner regardless of knowledge or fault until the vehicle is effectively transferred to a new owner on the record. Mandatory registration would help members of the public identify malefactors in the event of loss or injury, and encourage UAS owners to make sure their vehicles are flown responsibly and to keep registration records updated upon sale or transfer of the vehicle.&nbsp;&nbsp;</p>
<p>In the current federal budget environment, self-certification of small UAS appears to be the only practical alternative. It would be very difficult, if not impossible, for FAA to fund and staff up at the levels and within the time frames necessary to accommodate the tidal wave of UAS on the immediate horizon.</p>
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<p><strong><a name="f"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">Costly New Towers Need Retrofit for Paper Flight Strips</span>. Brand-new control towers at Las Vegas and San Francisco cannot go into operation yet, because they do not have the equipment in place to handle paper flight strips. Design of the new towers presumed that FAA's prototype electronic flight strips system would be operational by the time the towers were finished. But that prototype system, being tested in Phoenix, is too unstable and crashes too often to be relied on. And while there is room for the paper flight strips equipment in the Las Vegas tower, the $77 million SFO tower will need extensive modification to accommodate such equipment.</p>
<p><span class="GramE"><span style="text-decoration: underline;">Paul Rinaldi Wins Highest ATC Honor</span>.</span> The president of the National Air Traffic Controllers Association, Paul Rinaldi, is the recipient of the 2016 Glen A. Gilbert Memorial Award. The award is named for a pioneer of air traffic control in the 1930s. It will be presented to Rinaldi at the 2016 annual conference of the Air Traffic Control Association (ATCA) in October. As noted in the previous issue of this newsletter, in retirement Glen Gilbert called for air traffic control to be shifted from the FAA to a federally chartered nonprofit corporation.</p>
<p><span class="GramE"><span style="text-decoration: underline;">1994 Clinton ATC Corporation Documents Now Online</span>.</span> Our friends at <em>Eno Transportation Weekly</em> posted as their May 27<sup>th</sup> Document of the Week a set of 1994 Clinton White House documents on the proposed divestiture of the ATC system from the FAA. Included are an options paper, a video of the news conference in which Vice President Gore and DOT Secretary Pena announced their U.S. Air Traffic Services Corporation plan, and the April 1995 legislation that DOT submitted to Congress, including a section-by-section <span class="GramE">summary.</span> Go to: <a href="https://www.enotrans.org/article/document-week-1994-clinton-white-house-memos-air-traffic-control-spinoff">https://www.enotrans.org/article/document-week-1994-clinton-white-house-memos-air-traffic-control-spinoff</a>.</p>
<p><span class="GramE"><span style="text-decoration: underline;">Jane's ATC Technology Award</span>.</span> The winner of <em>IHS Jane's</em> ATC Award for technology is Saab and LFV (the Swedish ANSP) for pioneering the development of remote tower technology. The major milestone occurred in April 2015 when the world's first Remote Tower Center in <span class="SpellE">Ornskoldsvik</span> began controlling traffic at Sundsvall Airport, 150 km away. The award was presented at the 2016 World ATM Congress in Madrid, cosponsored by CANSO and ATCA.</p>
<p><span class="GramE"><span style="text-decoration: underline;">Jane's ATC Runway Award</span>.</span> <span class="SpellE">Eurocontrol</span>, Heathrow Airport, Lockheed Martin, and NATS shared the 2016 <em>IHS Jane's</em> ATC runway award for their project to implement time-based separation for approaches to the airport from continental Europe. The award was presented at the CANSO/ATCA 2016 World ATM Congress in Madrid.</p>
<p><span style="text-decoration: underline;">Global Aircraft Locating System One Step Closer</span>. Space-based ADS-B provider <span class="SpellE">Aireon</span> and the Irish Aviation Authority (IAA) announced on May 24<sup>th</sup> that IAA's service delivery equipment that will interface with <span class="SpellE">Aireon's</span> satellite constellation is performing to rigorous standards. Under a contractual agreement, IAA will be the host ANSP for <span class="SpellE">Aireon's</span> free global emergency-tracking service called Aircraft Locating and Emergency Response Tracking (ALERT). Plans call for the system to go live in 2018, after <span class="SpellE">Aireon's</span> full constellation of ADS-B equipped satellites is operational.</p>
<p><span class="SpellE"><span class="GramE"><span style="text-decoration: underline;">NAVCANatm</span></span></span><span class="GramE"><span style="text-decoration: underline;"> Lands New Business</span>.</span> <span class="SpellE">Nav</span> Canada's February/March newspaper, in recapping developments from the company's fiscal year 2015, reported additional customers for deployment of the company's tower automation system, which includes electronic flight strips. Four additional control towers in Australia and six towers in Italy will be equipped with this system in the coming year.</p>
<p><span style="text-decoration: underline;">COCESNA Upgrades Another Airport's Radar</span>. The ANSP serving six Central American countries (Belize, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) has announced a contract that will replace the aging radar at Nicaragua's Sandino International Airport in Managua. The new primary surveillance radar is being provided by <span class="SpellE">Indra</span>, which recently installed <span class="GramE">a similar</span> radar at El Salvador's main airport, and is under contract to do likewise for the airport in San Jose, Costa Rica. COCESNA, the Central American Corporation for Air Navigation Services, provides integrated air traffic management for Central America.</p>
<p><span style="text-decoration: underline;">Correction re Australia's <span class="SpellE">OneSky</span> Contract</span>. Last issue's article about the joint civil/military air traffic control modernization in Australia referred to a contract between <span class="SpellE">Airservices</span> Australia, Australian Defense Forces, and Thales. In fact, while Thales was the winning bidder, at press time the contract was still being negotiated.</p>
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<p><strong><a name="g"></a>Quotable Quotes</strong></p>
<p>"For Washington, DC residents, it was shocking to hear the U.S Secretary of Transportation threaten to shut down the region's Metro subway system. When major portions of our nation's infrastructure are neglected, it can have devastating impacts. The same is true of the air traffic control (ATC) workforce and the technology they use. Now, imagine the reaction to headlines announcing air travel shutting down due to a shortage of air traffic controllers and system neglect. The U.S. ATC system is at a critical juncture. If we don't act soon, there could be dire <span class="GramE">consequences.</span> . . . In addition to staffing issues, our current ATC system is running on dated technology and data recorded on paper strips that are passed around by hand. Canada, by contrast, has an advanced system. Pilots actually say that passing from our airspace to theirs feels like switching from black-and-white television to modern high-definition <span class="GramE">color.</span> . . . Those who support the status quo cannot deny these facts. If we don't take action to fix these problems soon, we will have human capital and infrastructure crises on our hands much bigger in scale than what is happening now with Metro."<br /> &mdash;Paul Rinaldi (President of NATCA), "Don't Let Our Air Traffic Control System Become the D.C. Metro of the Skies," <em>The Hill</em>, May 25, 2016</p>
<p>"Not only do we rely on antiquated technology, but we're also facing a looming crisis as staffing becomes a major issue. Currently, about one-third of the 11,000 certified air traffic controllers <span class="GramE">can</span> choose to retire at any time. Without any other changes, that's hardly a recipe for success as the demands on air travel continue to <span class="GramE">increase.</span> . . . Without a modernized ATC system, we will continue to find ourselves in the same place five, 10, or 15 years down the road. That is unacceptable, and opponents are relying on a fear of change to spread misinformation about these important reforms."<br /> &mdash;Jim Burnley (former Secretary of Transportation), "World's Busiest System Would Benefit from ATC Reform," <em>The Hill</em>, Feb. 15, 2016</p>
<p>"The reality is that as it is currently structured, FAA has been unable to move <span class="SpellE">NextGen</span> forward at a pace commensurate with the <span class="GramE">requirement.</span> . . . [<span class="GramE">M]<span class="SpellE">uch</span></span> of the problem lies outside the agency's control. It is subject to the vagaries and shifting priorities of the annual federal budget process. Given the importance of the US market, a modernized and efficient US air traffic control system is critical to the future growth of commercial aviation, and it is for that reason that we support legislation to modernize the system through creation of an independent, corporatized non-profit entity to perform these services."<br /> &mdash;Tony Tyler (Director General, IATA), in "Corporatized United States Air Navigation Proposal Sees Support Grow," International Air Transport Association, April 28, 2016</p>
<p>"I think there are benefits that we can't ignore as it relates to potentially changing and reforming government to improve the way FAA can manage air traffic and deliver <span class="SpellE">NextGen</span> benefits. There have been stacks and stacks of reports that identify challenges that the FAA's had, and some of the challenges appear to be related to some structural issues. That said<span class="GramE">,</span> Chairman Thune is listening to his colleagues. We think the best way to proceed at this point is to proceed, introduce a bill without it, and continue the conversation and see how things play out."<br /> &mdash;Bradley Edwards (Policy Director, Senate Commerce Committee), in Dee Ann Davis, "How Privatizing Air Traffic Control Could Affect Satellite Navigation's Role in Aviation," <em>Inside GNSS</em>, March/April 2016</p>
<p>"[<span class="SpellE"><span class="GramE">eLoran</span></span>] has acquitted itself not only as a general-purpose, multi-modal utility but has also amply fulfilled its aviation PNT requirements for terminal and en-route navigation and surveillance. In the United States alone, experts estimate that an <span class="SpellE">eLoran</span> system&mdash;with a shelf life of decades&mdash;could be built and operated surprisingly swiftly&mdash;with an annual budget of around $30 million. The question remains whether there will be the political will necessary to make progress on developing this as a global system."<br /> &mdash;Aimee Turner, "Worth the Wait," <em>Air Traffic Management</em>, Issue 3, 2015</p>
<p><a href="#top">&raquo; return to top</a></p>1014544@http://www.reason.orgThu, 09 Jun 2016 09:36:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #133http://www.reason.org/news/show/air-traffic-control-newsletter-133
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">U.S. falling behind in ATC modernization</a></li>
<li><a href="#b">Weak arguments from status-quo defenders</a></li>
<li><a href="#c">Progress on "union give-away" claims</a></li>
<li><a href="#d">Civil/military cooperation in ATC</a></li>
<li><a href="#e">Nav Canada model gains higher profile</a></li>
<li><a href="#f">An ATC history lesson</a></li>
<li><a href="#g">News Notes</a></li>
<li><a href="#h">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>U.S. Falling Behind in ATC Modernization</strong></p>
<p>Two events last week highlighted aviation stakeholder concerns that the FAA's Air Traffic Organization is falling further behind the state of the art in implementing advanced technology and procedures. The first was the Phoenix International Aviation Symposium on May 10<sup>th</sup>; the second was a panel on ATC modernization at the Bipartisan Policy Center May 13<sup>th</sup>. I was a panel member at the latter, and I talked with several who attended and spoke at the former.</p>
<p>At both events, NATCA President Paul Rinaldi lamented the slow pace of U.S. modernization, due not only to unstable and inadequate funding but also to a byzantine procurement process. Because that process takes many years and sometimes decades, the technology that finally gets implemented is often 10 or more years old. "The World War II technology is phasing out," he told the BPC audience, "and we're bringing in 1990s technology&mdash;because it takes that long." Referring to the recently completed ERAM software, he said this "new system" was 15 years out of date and $1 billion over budget by the time it finally went online.</p>
<p>"It may be that we are moving up to an iPhone 1 level, but some of our competitors are on iPhone 6 or 7," he told the Phoenix audience. By contrast, he said, Nav Canada is moving "full speed ahead." Regarding the continued use of paper flight strips in FAA facilities, he noted that Canada has had electronic flight strips for over a decade (and sells the system to other ANSPs), while it is taking FAA 25 years to finally replace its paper flight strips. At both events he informed listeners that when controllers at Nav Canada hand off a flight to the FAA, they have to do it manually&mdash;by telephoning their FAA counterparts, rather than doing it electronically. He also noted that while controller-pilot data link is operational nationwide in Canada (and across the North Atlantic), the earliest that FAA projects en-route use of that capability is 2022-24.</p>
<p>Given the wholly aviation audience in Phoenix, there was much discussion of corporation models, with comparisons of FAA, nonprofit corporation Nav Canada, and for-profit corporation NATS (U.K.). Willie Walsh of British Airways said he was not sure that NATS is the best model, and Rinaldi himself said Nav Canada is "an excellent model for Canada" but should not be blindly copied here. He repeated at both events that NATCA is opposed to a for-profit model.</p>
<p>In Phoenix, Jim Bowman of FedEx discussed the benefits and importance of space-based ADS-B. Rinaldi agreed, and noted that Iridium (developer of the Aireon space-based ADS-B system) had initially approached the FAA, but after the agency could not find a way it could invest in the system, Iridium turned to Nav Canada and very quickly got to "yes." Will Ris (recently retired from American Airlines) asked why space-based ADS-B has not been made a priority of the NextGen Advisory Committee, which Bowman agreed would make sense.</p>
<p>At both events Rinaldi raised the possibility that as other ANSPs that subscribe to global ADS-B reduce oceanic spacing to 15/15 nm (from today's 30/30 nm), the incompatibility with U.S. oceanic airspace will become a serious problem. He questioned whether ICAO, the entity that designates which ANSP is responsible for which oceanic airspace, would continue to tolerate U.S. oceanic airspace bottlenecks, raising the possibility of bit-by-bit loss of U.S. oceanic jurisdiction to more technically advanced ANSPs. Both Bowman of FedEx and Jeff Martin of JetBlue said that most U.S. airlines favor space-based ADS-B.</p>
<p>Note: you can watch a video of the one-hour BPC panel, moderated by <em>USA Today</em> transportation reporter Bart Jansen, at: <a href="http://bipartisanpolicy.org/events/modernizing-air-traffic">http://bipartisanpolicy.org/events/modernizing-air-traffic</a>.</p>
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<p><strong><a name="b"></a>Weak Arguments from Defenders of ATC Status Quo</strong></p>
<p>Two of the staunchest defenders of the FAA status quo are congressional appropriators (who fear loss of the ability to micromanage ATC via the budget) and business jet organization NBAA (which fears having to join the entire rest of the world in being expected to pay for the ATC services they use). But the caliber of the arguments these groups are making is, frankly, pathetic.</p>
<p>One example is the Senate Appropriations Committee's recent report accompanying the Senate's FY 2017 bill to appropriate funds for transportation and housing. It states that converting the FAA's Air Traffic Organization into a self-supporting ANSP:</p>
<ul type="disc">
<li>Would be fraught with risk;</li>
<li>Could lead to uncontrollable cost increases;</li>
<li>Could ultimately harm users and operators in the system.</li>
</ul>
<p>No evidence whatsoever is provided for these claims, nor is there any reference to reports from the MITRE Corporation, the Government Accountability Office, the DOT Inspector General, and academic researchers which have found that in nearly all 60+ instances of ATC corporatization, performance has improved, costs have been reduced, and safety is either the same or better. Nor does the committee express any interest in the fact that supporters of corporatization include nearly all major U.S. airlines, IATA, the air traffic controllers union, several pilots unions, a number of former DOT Secretaries and FAA Administrators, and all three former heads of the FAA's ATO.</p>
<p>The Committee's real agenda is contained in subsequent wording in its report: "The Committee strongly believes that air traffic control should remain . . . subject to ongoing congressional oversight so that resource needs and activities are reviewed . . . [via] the annual congressional oversight process." How's that been working out for airlines, controllers, etc.?</p>
<p>Even worse is the rhetoric from Ed Bolen, long-time CEO of NBAA. In "Our Battle Against ATC Privatization" in the April issue of <em>Professional Pilot</em>, Bolen lists four "facts" about the ATC Corporation plan included in HR 4441, the bill passed in February by the House Transportation &amp; Infrastructure Committee.</p>
<p>First, he says that control over ATC "would be stripped from Congress and placed in the hands of a privately-elected Board of Directors that HR 4441 terms a Corporation." Left unsaid is that this would be a federally chartered nonprofit corporation, of which thousands exist (mostly credit unions), and is directly modeled after what many have judged to be the world's best ANSP, Nav Canada.</p>
<p>Second, "Airline reps would dominate Board control." He says that of 12 (actually 13) board seats, "only 2" would be held by noncommercial owners and operators, while airlines would dominate. He never notes that only 4 members would be nominated by airlines, which is hardly domination, and that since airlines would pay more than 95% of the user fees and noncommercial flyers would pay zero, this board structure is actually overly generous to non-paying system users. Yet airlines have not objected to the unfairness of this disparity.</p>
<p>Third, "airports and airspace use would be decided by the Board." This point was debated during the February hearing at which I testified, and it was made clear that the intent of the drafters was that safety regulator FAA would still be in charge of such decisions, by having to approve or disapprove of new ATC procedures.</p>
<p>Finally, Bolen writes that "New user fees are probable and would be voted by the board." Nowhere does he disclose to his readers that the language in the bill flatly prohibits user fees for noncommercial general and business aviation (which includes corporate jets).</p>
<p>Bolen's real agenda is to protect the very comfortable status quo, under which business jets pay a pittance in fuel taxes into the Aviation Trust Fund but use significant amounts of ATC services. At the BPC panel discussion last week, panelist Bolen was asked what fraction of current ATC costs general and business aviation pays via current aviation user taxes. His reply was eight and a half percent. I could not let that pass, and told the audience that the GRA, Inc. analysis of FAA data (FY 2013) showed that general and business aviation fuel taxes provide <em>less than 1%</em> of Aviation Trust Fund revenue, while a DOT Inspector General report found that business jets alone account for 12% of tower operations, 13% of TRACON operations, and 11% of en-route miles flown. Those are not numbers Bolen likes to see publicized.</p>
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<p><strong><a name="c"></a>Some Progress on Conservative "Union Give-away" Claims</strong></p>
<p>The attacks on the ATC Corporation provision in the House reauthorization bill by a small number of conservatives are continuing, but some of those critics are conceding that ATC does need to be removed from the FAA and corporatized or privatized. Some of this change may be due to responses that Marc Scribner of the Competitive Enterprise Institute and I have posted on conservative online sites. <em>National Review Online</em> posted my piece "Conservatives Against Modern Skies?" on May 2<sup>nd</sup>, recounting the Reagan-era roots of ATC corporatization and countering the main "union-giveaway" claims. The Capital Research Center published my shorter piece, "Why Conservatives and Libertarians Support ATC Corporatization" on April 15<sup>th</sup>. Scribner posted an excellent response on the CEI website, "Conservatives for Big Government: Air Traffic Control Opponents Have Lost Their Minds or Principles" on May 10<sup>th</sup>.</p>
<p>Subsequently, James Sherk of the Heritage Foundation conceded that there is, indeed, a need to get ATC out of the FAA and that a federally chartered nonprofit corporation is a sensible approach that might emulate the success of Nav Canada. But his May 13 post, "Union Giveaways in Air Traffic Control Bill Set a Bad Precedent," repeated previous conservative arguments against provisions calling for binding arbitration, the absence of a federal salary cap, allowing controllers to retain their current retirement benefits, and what he claims are reduced strike penalties compared with the status quo. Scribner's latest CEI post, "Air Traffic Control in Urgent Need of Reform . . . If Only Critics Could See That," argues against these points as made in yet another post by Diana Furchtgott-Roth.</p>
<p>Since I am not an expert on labor law, I defer in part to experts like former ATO chief David Grizzle, who defends the labor provisions of the bill as fair and reasonable, and giving management a stronger hand than airline managers have in labor negotiations. But here are a few other points to consider in assessing these claims.</p>
<p>It appears to me that these conservative critics can't quite grasp that a federally chartered private corporation is not the government. Of course there should not be a federal salary cap for a new entity that is <em>not in any way covered by federal civil service laws.</em> One of the main points of the reform is to free air traffic control from that constraint so it can offer market-based compensation to attract and retain highly skilled engineers, software people, and controllers.</p>
<p>Second, if the provisions in the bill are not explicit enough about strikes by controllers not being allowed, it would be simple to fix that via a one-sentence amendment expressly authorizing the new corporation to fire illegally striking workers (as Sherk proposed). And that, as it turns out, would be no big deal for NATCA. After the BPC panel adjourned, I asked Paul Rinaldi if such an amendment would be a problem for him&mdash;and his reply was absolutely not. They have no desire to strike, he told me; they just want a better ATC system like those they observe in other countries. And he didn't just say that to me, in private. One of my Phoenix conference informants tells me that Rinaldi said the same thing from the stage in the session on ATC reform. He does not want a right to strike, he told the audience. He "loves the system and wouldn't want to do anything to hurt it."</p>
<p>I'm encouraged by these developments, and hope conservative opponents will move toward making constructive suggestions rather than denouncing the bill.</p>
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<p><strong><a name="d"></a>Civil/Military Cooperation in Air Traffic Control</strong></p>
<p>During February's hearing on the ATC Corporation provision of the AIRR Act, several Members expressed concern over a feared disruption of the relationship between civil and military ATC. This is hardly a new issue, and it has been addressed in every one of the 60+ countries that have corporatized their ATC systems. Provisions are included in the bill to deal with this, and civil/military collaborations in a number of other countries go well beyond what exists here.</p>
<p>To begin with, according to the DoD Policy Board on Federal Aviation, DoD operates 235 airports and heliports in the United States, shares 29 military airports with local governments, and is a shared user (with active-duty military units) at three civil airports. As an ATC provider, DoD manages about 16% of U.S. airspace, employs over 8,000 air traffic controllers in one en-route center and 168 control towers, and maintains 438 navigational aids and 1,600 instrument approach procedures.</p>
<p>The AIRR Act provides continuity with this civil/military status quo. On the website of the Coalition for Modern Skies (<a href="http://www.modernskies.org">www.modernskies.org</a>), you will see that DoD personnel will sit side-by-side with ATC Corporation personnel at the ATC System Command Center and other major facilities just as they do now. Existing lines of communication for both day-to-day operations and national emergencies would continue as they are today. The legislation also provides that in time of war, the President may temporarily transfer control over aspects of the ATC system to DoD, just as at present. A DoD member would occupy one of the seats on the new corporation's Advisory Board.</p>
<p>Australia is well under way in a major effort to implement a single civil/military ATC software system called OneSKY, to replace ANSP Airservices Australia's current Australian Advanced Air Traffic System (AAATS), implemented in the late 1990s, and the current military system. Defence and Airservices are jointly funding and managing procurement of the new system, which Thales Australia is under contract to deliver. It is planned to be phased in from 2018 to 2021.</p>
<p>Belgium might be the second country to merge civil and military ATC. Belgian ANSP BelgoControl and the military's Belgian Air Component launched a joint study effort last year to explore full integration of the two systems, including the development of a business case. The UK's NATS has a close working relationship with Defence Airspace and Air Traffic Management. At NATS' Swanwick London Area and Terminal Control Center, military air traffic staffers are embedded throughout the operation.</p>
<p>In short, active cooperation between corporatized ANSPs and military ATC is well-established globally, and has been provided for appropriately in the proposed US corporatization.</p>
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<p><strong><a name="e"></a>Nav Canada Model Gains Increased Visibility</strong></p>
<p>Last month saw the 20-year track record of Nav Canada gain far greater visibility to the general public. Major national media coverage documented its successes, and an aviation group in Australia called for shifting to Canada's nonprofit, private corporation model instead of their current government corporation (Airservices Australia).</p>
<p>The two major newspaper stories appeared two weeks apart, and covered similar territory. Alan Levin of <em>Bloomberg</em> focused on U.S. controllers' envy of the Canadian system ("Paper-Pushing Flight Controllers See Future in Canada's System," April 12<sup>th</sup>), while the <em>Wall Street Journal</em>'s Scott McCartney focused on the better service received by airlines ("The Air Traffic System U.S. Airlines Wish they Had," April 27<sup>th</sup>).</p>
<p>Levin's article recounted Nav Canada's initial challenge of fixing and implementing a troubled new computer system, which led to the company's shift to developing many improvements in-house. Led by MITRE Corporation veteran Sid Koslow (as VP and Chief Technical Officer), the company hired top-notch engineers and software people that it teamed up with controllers and technicians to develop solutions that worked right from the outset. This has led to an array of new systems and procedures, including electronic flight strips, digital controller-pilot messaging, and investment in global space-based ADS-B provider Aireon. Levin quotes MIT aeronautics professor John Hansman saying "There are a lot of positives to be learned from the Canadian experience. They run a really good shop, and they have been technically innovative."</p>
<p>McCartney covered some of the same ground, but more from the perspective of Nav Canada's airline customers, such as American Airlines VP Lorne Cass, who praised the company for "continuous modernization" and greater flexibility than FAA has. Improvements such as digital communications and conflict-alerting software enable more planes to fly optimal routes that minimize fuel burn and stay on schedule. McCartney also noted Nav Canada's April 8<sup>th</sup> announcement of its upcoming third reduction in ATC charges, after 12 years without any rate increases.</p>
<p>And if imitation is the sincerest form of flattery, the proposal from The Australian Aviation Associations' Forum (TAAAF) on April 28<sup>th</sup> shows the increasing appeal of the Nav Canada model. That organization&mdash;representing regional airlines, private plane owners, and several other aviation stakeholders&mdash;called for the Australian government to convert Airservices Australia from a government corporation into a private nonprofit corporation similar to Nav Canada. Major airlines (such as Qantas and Virgin Australia) have neither supported nor opposed the plan, being focused on a current efficiency campaign at the ANSP. TAAAF pointed to cost increases and political micromanagement as ongoing problems at Airservices, in contrast to the self-managed Nav Canada which runs a lean but highly productive organization. TAAAF is chaired by Greg Russell, a former CEO of Airservices Australia.</p>
<p>I close with an excerpt from the closing portion of McCartney's <em>WSJ</em> article, in which he describes the transition of a flight from Canadian to U.S. airspace:</p>
<blockquote>
<p>"Rarely do [Nav Canada] controllers have to call each other to coordinate flights anymore, but making changes with the FAA on cross-border flights can't be done electronically. As [shift manager Jerome Gagnon] explains the process in the Montreal tower, other controllers start laughing. One blurts out incredulously, 'You still have to call the FAA by phone!'"</p>
</blockquote>
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<p><strong><a name="f"></a>An ATC History Lesson</strong></p>
<p>I did my first research on air traffic control in 1979, when I visited the library at the Air &amp; Space Museum in Washington, DC and the corporate archives of ARINC in Annapolis, MD. In my second job out of college, two of my co-workers had come from ARINC, and they told me that this nonprofit corporation had actually started U.S. air traffic control. I'd subsequently met law professor Michael Levine, who told me that ARINC had later set up nonprofit, airline user co-op companies to provide ATC in Cuba and Mexico.</p>
<p>My research confirmed these points, and I wrote about them in a chapter called "Toward Safer Skies," in the Reason Foundation book <em>Instead of Regulation</em> (Lexington Books, 1982). I learned that fledgling U.S. airlines created ARINC in 1929 to be the licensee of radio frequencies for air-to-ground communications, which were just being introduced. ARINC pioneered improvements in radio navigation equipment in the 1930s, and when the need for managing air traffic became apparent, it created the first Airway Traffic Control Centers in Chicago, Cleveland, and Newark in 1935-36. Each managed traffic only within 50 miles of the respective airport. But with a growing role of the federal Bureau of Air Commerce (in setting up lighted beacons along airways, etc.), that agency took over the three ARINC centers in 1936 and began setting up others. After World War II, ARINC set up RAMSA for Mexico and RACSA for Cuba, in each case as nonprofit airline user co-op corporations. Both were later nationalized, but operated those countries' ATC systems for many years prior to government takeover.</p>
<p>In other words, the nonprofit, self-supporting stakeholder-governed corporation has a long pedigree in aviation.</p>
<p>And there's more. Glen A. Gilbert is often known as the "father of air traffic control." The Air Traffic Control Association's highest annual award is named after him. As a dispatcher for American Airlines, he developed the first "flight following system" in Chicago in 1934. In 1935, when the airlines, via ARINC, agreed on a plan to develop Airway Traffic Control Centers, Gilbert set up the Newark center and helped establish the Chicago and Cleveland ones. When the government took over those centers, Gilbert became one of its first air traffic controllers. In retirement in the 1960s, he published several articles on the history of air traffic control. And in 1968 he called for the ATC system to be separated from the FAA and set up as a "Comsat-type nonprofit corporation." In 1975 Gilbert fleshed out that concept in a two-volume study called <em>The U.S. Air Traffic Services Corporation</em>, published by his consulting firm.</p>
<p>What the Clinton Administration proposed in 1994-95 and what Chairman Shuster has proposed in 2016 have their roots in the pioneering work of ARINC and Glen A. Gilbert.</p>
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<p><strong><a name="g"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">Lauer in the Tower Aghast at Paper Flight Strips</span>. Matt Lauer of the <em>Today</em> show recently spent a day "interning" in the control tower at JFK International Airport. One of his duties was "stuffing strips"&mdash;organizing the paper flight strips onto which controllers hand-write notes, which get passed along by hand to fellow controllers. Back in the studio, Lauer marveled at how low-tech this system is in the high-tech world we live in. It's still available to watch at: <a href="http://www.today.com/money/matt-lauer-interns-jfk-s-air-traffic-control-tower-t77201">http://www.today.com/money/matt-lauer-interns-jfk-s-air-traffic-control-tower-t77201</a>.</p>
<p><span style="text-decoration: underline;">Prominent Democrats Endorse ATC Corporatization</span>. Last month seven former Democratic officials sent a letter to every member of the House and Senate endorsing the corporatization of air traffic control. Included were former DOT Secretaries Federico Pena and Norm Mineta, former OMB Director Peter Orszag, former DOD and OMB official Josh Gottbaum, former Virginia Gov. Gerald Baliles, former National Performance Review director Elaine Kamarck, and former White House infrastructure expert Dorothy Robyn. They pointed out that all the same problems still exist that the Clinton Administration highlighted in its plan for a U.S. Air Traffic Services Corporation.</p>
<p><span style="text-decoration: underline;">Space-Based Surveillance for Southern Africa</span>. On May 3<sup>rd</sup>, space-based ADS-B pioneer Aireon announced an agreement with the ANSP of South Africa&mdash;ATNS&mdash;to provide space-based surveillance for all 15 member countries of the Southern African Development Community (SADC). For the past decade, ATNS has operated the regional VSAT communications network linking the region's ANSPs, and that network will be used to provide them with real-time ADS-B data from Aireon's constellation of Iridium Next satellites. The first launches are scheduled for this summer on SpaceX Falcon 9 rockets, with the entire constellation to be in place by the end of 2017 and Aireon service in operation by 2018.</p>
<p><span style="text-decoration: underline;">ASECNA's New Ground-Based ADS-B Network</span>. Across central Africa, the regional ANSP ASECNA has signed a contract with Indra to provide ground-based ADS-B systems to be used for approach and landing surveillance in 17 countries and several French Overseas Departments in the Indian Ocean. Indra will provide the network of ADS-B sites, central ADS-B servers, and data merging services. The information will be provided to individual ATC facilities via ASECNA's existing communications network.</p>
<p><span style="text-decoration: underline;">Lawsuit Targets FAA and EEOC Over Controller "Diversity"</span>. Last December Mountain States Legal Foundation (MSLF) sued the FAA for using its Biographical Assessment to screen out highly qualified applicants for controller positions. FAA sent the complaint to the Equal Employment Opportunity Commission for a ruling on the complaint's validity. But since EEOC had not responded by April, MSLF amended its original complaint on April 18<sup>th</sup>, adding EEOC chair Jenny Yang. The <em>Daily Caller</em>'s Evan Gahr has been unable to get a response from EEOC on the matter.</p>
<p><span style="text-decoration: underline;">DFS Implements Arrivals Management at Munich</span>. The ANSP of Germany, DFS, has implemented a second arrivals management procedure, this one for arrivals to Munich from the west. An earlier procedure, handling arrivals from the Vienna control center, has been in operation since 2010. Both adjust aircraft flight speed in real time to enable as close to on-time arrivals as possible, using continuous descents and other streamlined procedures to eliminate planes ending up in holding patterns prior to approach and landing. This Karlsruhe/Munich Extended Arrivals Management is part of a project involving the set of ANSPs in the FABEC functional airspace block, and is similar to the system recently implemented by NATS for arrivals to Heathrow Airport from Europe.</p>
<p><span style="text-decoration: underline;">PANSA to Deploy Data Link in Poland</span>. Polish ANSP PANSA has signed a contract with SITA to implement air-to-ground data link services in Polish airspace. SITAOnAir will provide VHF ground stations to provide controller-pilot data link communications (CPDLC) across the country. The company has signed contracts with 14 European ANSPs to deliver such services, including DFS (Germany) and ENAV (Italy). Due to frequency constraints, the European Commission recently postponed the date by which all aircraft flying at 28,500 ft. and above must be equipped for CPDLC; the revised date is Feb. 5, 2020.</p>
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<p><strong><a name="h"></a>Quotable Quotes</strong></p>
<p>"Since a blue-ribbon panel formed by President Bill Clinton two decades ago first recommended creating an independent entity accountable to the public, little has been done to make that plan a reality. Meanwhile, other nations have taken action to adopt such a model&mdash;and proven that it successfully works. Our northern neighbors in Canada have demonstrated that separating safety and management responsibility can yield a more innovative and efficient approach to air traffic control. The U.S. is one of the few advanced nations where you find the same agency regulating safety and operating the air traffic control function. This needs to change. The recently proposed Aviation Innovation, Reform, and Reauthorization Act will establish an organization that will be free from senseless partisan bickering. America's air travelers should not be forced to endure subpar air traffic control services because of sequesters, continuing resolutions, and other feuds in Washington."<br /> &mdash;Robin Hayes, CEO, JetBlue, "A Call to Modernize Our Nation's Air Traffic and Safety," <em>Boston Business Journal</em>, April 27, 2016</p>
<p>"As corporatization has come into air traffic management, costs have gone down, cooperation has gone up, transparency has gone up, and the ability for these organizations to manage themselves in a businesslike manner has provided them untold benefits. . . . The fact is, to run a 24-hour system 365 days a year, you have to continue to plow money into technology that takes you to a smarter future. You have to be competitive in terms of providing services in what is without question, one of the busiest air spaces in the world. . . . The politics need to be separate from the business, and right now it's all mixed up. It is very difficult for people that work in the FAA to actually do their job in a businesslike manner when they are really hamstrung with an awful lot of procedures that wouldn't be necessary in a businesslike environment."<br /> &mdash;Nancy Graham, former director, Air Navigation Bureau, ICAO, quoted in Dee Ann Divis, "How Privatizing Air Traffic Control Could Affect Satellite Navigation's Role in Aviation," <em>Inside GNSS</em>, March/April 2016</p>
<p>"More than 50 countries have adopted modernized air traffic control systems, and senior officials at every one have said that the benefits of separating from government control have vastly outweighed the challenges of putting the system in place. Rapid technology upgrades and changes in the ability to recruit skilled engineering talent, and the predictability and availability of adequate financial capital were all common reasons for reform. . . . In 1994 I joined the Clinton Administration to help lead an effort to modernize our country's air navigation system. At the time, I thought that a properly managed government agency could do almost as good a job as the private sector. I was wrong. Several of my colleagues from the Clinton Administration have reached this same conclusion, including former Virginia Gov. Gerald Baliles, who served as chairman of the 1993 Commission to Ensure a Strong Competitive Airline Industry. Baliles joined six other former senior administration officials in authoring a recent letter to members of Congress asking them to adopt air traffic control reform."<br /> &mdash;George L. Donohue, George Mason University, "Benefits of Air Traffic Control Reforms Outweigh Challenges of Transition," <em>Richmond Times-Dispatch</em>, April 30, 2016</p>
<p>"We [at Aireon] are going to worldwide, real-time surveillance everywhere on the planet. Just in oceanic airspace, the fuel savings are in the billions of dollars, and the greenhouse gas emission savings are millions of tons. So in that respect alone, the impact will be staggering. But it's also going to bring surveillance to the whole continent of Africa overnight, and to all kinds of areas where radar is less effective, such as mountainous regions in North America. At this time, we can't even itemize all the benefits it's going to bring. I think as we go forward in the next year or two, we're going to keep discovering all kinds of new applications and efficiencies [Aireon] will enable. ANSPs will be able to operate better because now they're going to have one big unified picture to tie into their system. So I really think this is revolutionary."<br /> &mdash;John Crichton, Chairman, Aireon, in Adrian Schofield, "Proven Model," <em>Aviation Week &amp; Space Technology</em>, February 29-March 12, 2016</p>1014529@http://www.reason.orgWed, 18 May 2016 10:55:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #132http://www.reason.org/news/show/air-traffic-control-newsletter-132
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">House Democrats' dissenting views</a></li>
<li><a href="#b">A closer look at FAA's aviation forecast</a></li>
<li><a href="#c">Right-wing groups up the anti-union ante</a></li>
<li><a href="#d">CBO's misleading budget score of the ATC corporation</a></li>
<li><a href="#e">Further thoughts on the ATO's assets</a></li>
<li><a href="#f">News Notes</a></li>
<li><a href="#g">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>House Democrats' Dissenting Views</strong></p>
<p>On March 1<sup>st</sup>, House Transportation &amp; Infrastructure Committee Ranking Member Peter DeFazio (D, OR) and Aviation Subcommittee Ranking Member Rick Larson (D, WA) sent out a Dear Colleague letter opposing the ATC corporatization provisions in the bill approved in February by the T&amp;I Committee (HR 4441, the AIRR Act). As Senate Democrats consider whether to include such provisions in their bill, a thoughtful review of the DeFazio/Larson letter's points is in order.</p>
<p>To begin with, of course, they continue to mis-label the provision as "privatization," knowing that this term conjures up images of a for-profit company taking over the ATC system, or of outsourcing a government function to a (non-unionized) private company. Neither is the case in HR 4111, which proposes to reform the existing Air Traffic Organization simply by separating it from safety regulator FAA, allowing it to charge customers directly for its services (with exceptions for general and corporate aviation) and issue revenue bonds (as airports do), and be governed by a 13-member board nominated by all key aviation stakeholders.</p>
<p>Beyond that basic mis-characterization, the letter goes on to make five claims about why the change should not happen.</p>
<p><em>"The AIRR Act jeopardizes aviation safety."</em> The main point offered in support of this claim is that it would leave the remaining 7,400 FAA safety regulatory employees "vulnerable to Congressional budget cuts and shut-downs." Today <em>the entire 46,500-person FAA workforce</em> is vulnerable in this manner, so rescuing the Air Traffic Organization would be a large step in the right direction. Moreover, were there any serious likelihood of corporatization jeopardizing air safety, controllers' union NATCA would not be supporting it. In fact, separating the regulator and the operator increases visibility about which organization makes which decision, improves accountability, and increases the level of safety.</p>
<p><em>"It also severs ties between the Department of Defense and the ATC system."</em> This assertion is made up out of whole cloth. The bill changes nothing about this important relationship, except for exempting military flights from paying the fees that airlines will pay for using the ATC corporation's services. And for context, civil-military collaboration is alive and well with corporatized air navigation service providers overseas. Airservices Australia and the Australian military are jointly procuring a new en-route ATC system under a program called OneSky, and &nbsp;BelgoControl is in discussions with the Belgian Armed Services about a full merger of civil/military ATC. The new structure here would further facilitate cooperation between civil and military ATC providers to help the military modernize its aging ATC infrastructure.</p>
<p><em>The ATC corporation "would be too big and too critical to fail; the American public would be required to bail out the corporation if it were to default."</em> This subject came up during the February hearing at which I testified. I explained that we learned from the severe decline in air travel post-9/11 that ATC corporations need a reserve fund to tide them over serious traffic and revenue declines. Nav Canada had one, and did not need a bail-out. But newly created NATS in the UK did not have a reserve fund, and ended up getting a public infusion of capital (as did numerous U.S. airlines). In a back-and-forth with DeFazio, I noted that Nav Canada instituted a temporary rate increase (much smaller than if it had not had a reserve fund), which DeFazio seized on, and he repeats in the Dear Colleague letter my statement that it would be <em>customers</em>, not taxpayers, who might have to pay more, depending on the size of the reserve fund. But those customers would be airlines, not "the American public."</p>
<p><em>"The AIRR Act gives the corporation an unprecedented power to tax American consumers to pay for the ATC system."</em> This is doubly incorrect. First, the shift from current aviation excise taxes to ATC user fees would shift the locus of payment from passenger ticket taxes to charges paid by the airlines. ATC fees would be another operating cost&mdash;like payroll, fuel, airport landing fees, etc. There would be no "charge" to passengers. Secondly, as I also pointed out during the hearing, there is a fundamental difference between a charge for a service one uses (e.g., electric bills sent out by government utility Tennessee Valley Authority) and a tax. There is an extensive, detailed legal history that clearly distinguishes between user charges and taxes.</p>
<p><em>The ATC corporation "could disregard the effects of aircraft noise and pollution."</em> On this question I checked with former FAA Chief Counsel (and also former COO of the Air Traffic Organization) David Grizzle. He verified what I thought was the case: that changes in ATC procedures (such as new RNP arrival routes that change which properties are impacted by noise) are subject to the approval of the safety regulator (FAA), also subject to the National Environmental Policy Act, and are not decided unilaterally by the ATC corporation. So people concerned about noise and pollution would have <em>the same recourse they have today</em>: complain to the FAA.</p>
<p>Frankly, I have a hard time accepting that smart and aviation-knowledgeable people like Reps. DeFazio and Larson actually believe the things they wrote in this Dear Colleague letter. I hope their colleagues in the Senate will take a more open-minded and fact-based look at these important questions.</p>
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<p><strong><a name="b"></a>A Closer Look at the FAA's Latest Aviation Forecast</strong></p>
<p>The headline version of the projections in FAA's <em>FY 2016 Aerospace Forecast</em> focused on airline passenger miles, which grew a bit faster last year and led to the agency slightly increasing its forecast of airline revenue passenger miles (RPMs) for the next 20 years (annual growth of 2.6% vs. 2.5% in last year's forecast). But less-noticed are some disturbing trends for air traffic control deep in the data charts of the <em>Forecast</em>.</p>
<p>Long-time readers of this newsletter may remember that for years I have charged the agency with presenting rosy scenarios in these annual documents. Ever since the peak (pre-9/11) year of 2000, aviation growth has been mediocre&mdash;but the forecast always projects a strong upward trend going forward. Last month the Government Accountability Office formally noted this problem, finding that these FAA annual forecasts "have consistently overestimated aviation activity since 2004" and "have been less accurate the further out they forecast." (GAO-16-210, March 2016). In particular, the mean percentage error in total aircraft operations was 25.5% in FAA's five-year forecasts and 54.7% in its 10-year forecasts (always in the same direction).</p>
<p>I'm sure FAA knew this report was coming, and in its data tables projecting <em>ATC activity</em>, the annual growth rate projections have been trimmed somewhat, as follows:</p>
<table border="1" width="" cellspacing="0" cellpadding="1">
<tbody>
<tr>
<td valign="top" width="160">&nbsp;</td>
<td valign="top" width="160">
<p>2014</p>
</td>
<td valign="top" width="160">
<p>2016</p>
</td>
</tr>
<tr>
<td valign="top" width="160">
<p>Tower activity growth rate</p>
</td>
<td valign="top" width="160">
<p>1%</p>
</td>
<td valign="top" width="160">
<p>0.9%</p>
</td>
</tr>
<tr>
<td valign="top" width="160">
<p>TRACON growth rate</p>
</td>
<td valign="top" width="160">
<p>1.2%</p>
</td>
<td valign="top" width="160">
<p>1.1%</p>
</td>
</tr>
<tr>
<td valign="top" width="160">
<p>Center growth rate</p>
</td>
<td valign="top" width="160">
<p>1.7%</p>
</td>
<td valign="top" width="160">
<p>1.4%</p>
</td>
</tr>
</tbody>
</table>
<p>But in comparing the last several years' <em>Forecast</em> reports, I noticed another problem. Through 2014, the data charts used 2000 as the baseline for historical comparisons, but the 2015 and 2016 reports now use 2001. That makes a huge difference: 2000 saw the highest rates of U.S. flight activity ever recorded, whereas 2001's numbers were in the tank, due to the aftermath of 9/11. Neither one is a "typical" year to use as a baseline, but 2001's numbers were so low that anything higher looks like an up-trend.</p>
<p>Hence, to provide some perspective on needed future ATC capacity, the numbers below compare FAA's new forecast figures for 2036 with the older historical baseline of 2000.</p>
<table border="1" width="100%" cellspacing="0" cellpadding="1">
<tbody>
<tr>
<td colspan="6" valign="top"><strong>Projected vs. Historical ATC Activity Levels in FAA Annual Forecasts</strong></td>
</tr>
<tr>
<td valign="top">&nbsp;</td>
<td valign="top">
<p><strong>Airlines</strong></p>
</td>
<td valign="top">
<p><strong>Air Taxi/Commuter</strong></p>
</td>
<td valign="top">
<p><strong>General Aviation</strong></p>
</td>
<td valign="top">
<p><strong>Military</strong></p>
</td>
<td valign="top">
<p><strong>Total</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p>Towers 2000</p>
</td>
<td valign="top">
<p>15,159</p>
</td>
<td valign="top">
<p>10,760</p>
</td>
<td valign="top">
<p>39,878</p>
</td>
<td valign="top">
<p>2,888</p>
</td>
<td valign="top">
<p>68,686</p>
</td>
</tr>
<tr>
<td valign="top">
<p>Towers 2036</p>
</td>
<td valign="top">
<p>23,695</p>
</td>
<td valign="top">
<p>&nbsp; 6,199</p>
</td>
<td valign="top">
<p>27,514</p>
</td>
<td valign="top">
<p>2,495</p>
</td>
<td valign="top">
<p>59,904</p>
</td>
</tr>
<tr>
<td valign="top">
<p><strong>% change Towers</strong></p>
</td>
<td valign="top">
<p><strong>+56%</strong></p>
</td>
<td valign="top">
<p><strong>-41%</strong></p>
</td>
<td valign="top">
<p><strong>-31%</strong></p>
</td>
<td valign="top">
<p><strong>-14%</strong></p>
</td>
<td valign="top">
<p><strong>-13%</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p>TRACONs 2000</p>
</td>
<td valign="top">
<p>16,395</p>
</td>
<td valign="top">
<p>11,198</p>
</td>
<td valign="top">
<p>20,799</p>
</td>
<td valign="top">
<p>3,467</p>
</td>
<td valign="top">
<p>51,859</p>
</td>
</tr>
<tr>
<td valign="top">
<p>TRACONs 2036</p>
</td>
<td valign="top">
<p>23,894</p>
</td>
<td valign="top">
<p>&nbsp; 5,894</p>
</td>
<td valign="top">
<p>14,288</p>
</td>
<td valign="top">
<p>2,286</p>
</td>
<td valign="top">
<p>46,361</p>
</td>
</tr>
<tr>
<td valign="top">
<p><strong>% change TRACONs</strong></p>
</td>
<td valign="top">
<p><strong>+46%</strong></p>
</td>
<td valign="top">
<p><strong>-47%</strong></p>
</td>
<td valign="top">
<p><strong>-31%</strong></p>
</td>
<td valign="top">
<p><strong>-34%</strong></p>
</td>
<td valign="top">
<p><strong>-11%</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p>Centers 2000</p>
</td>
<td valign="top">
<p>24,987</p>
</td>
<td valign="top">
<p>8,101</p>
</td>
<td valign="top">
<p>8,744</p>
</td>
<td valign="top">
<p>4,192</p>
</td>
<td valign="top">
<p>46,025</p>
</td>
</tr>
<tr>
<td valign="top">
<p>Centers 2036</p>
</td>
<td valign="top">
<p>39,631</p>
</td>
<td valign="top">
<p>6,388</p>
</td>
<td valign="top">
<p>8,063</p>
</td>
<td valign="top">
<p>1,795</p>
</td>
<td valign="top">
<p>55,876</p>
</td>
</tr>
<tr>
<td valign="top">
<p><strong>% change Centers</strong></p>
</td>
<td valign="top">
<p><strong>+59%</strong></p>
</td>
<td valign="top">
<p><strong>-21%</strong></p>
</td>
<td valign="top">
<p><strong>-8%</strong></p>
</td>
<td valign="top">
<p><strong>-57%</strong></p>
</td>
<td valign="top">
<p><strong>+21%</strong></p>
</td>
</tr>
</tbody>
</table>
<p>We can see that compared with the peak year of 2000, nearly every segment of aviation is projected to have significantly less ATC activity 20 years from now. Only the airline segment is forecast to have significant growth in ATC operations over this period. In terms of ATC facility usage, towers and TRACONs are forecast&mdash;in aggregate&mdash;to have 11 to 13% less activity than in 2000. Only the en-route Centers will have more&mdash;with a whopping 59% more airline activity offsetting declines in air taxi, GA, and military operations to net out at 21% more Center transactions in 2036. These kinds of projections (assuming they are realistic) have significant implications for ATC capital investment planning, facility consolidation, and related matters that the ATO and its successor organization must be prepared to deal with.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="c"></a>Right-Wing Groups Up the Anti-Union Ante</strong></p>
<p>Last month I wrote about misleading and incorrect arguments in two blog posts on <em>National Review Online</em> claiming that the House FAA bill that includes ATC corporatization is "fake privatization" and a "union giveaway." Those charges had also been made in an anti-union screed in <em>The Daily Caller</em>.</p>
<p>But late last month the conservative research group Capital Research Center (CRC) released the March edition of its <em>Labor Watch</em> newsletter, devoting nine pages to an anti-corporatization diatribe called "PATCO's Revenge." Much of the piece recounts the history of the 1981 illegal strike by former controllers union PATCO which led to President Reagan firing those who refused to return to work. Another large chunk of the article is a long personal attack on Chairman Bill Shuster's father (former Rep. Bud Shuster), followed by repeating previously aired information about Bill Shuster dating a lobbyist for airline trade group A4A. None of this has anything to do with the merits of ATC corporatization, and seems to be an example of the old adage that if you can't discredit the substance of a message, try to discredit the messenger.</p>
<p>In the small fraction of the piece that attempts to deal with the substance of the issue, it repeats almost word-for-word the DeFazio line of argument that the bill would "create an unaccountable special-interest-controlled monopoly 'corporation,'" and also that it "would give the controllers union the deal of a lifetime." Its only citation for the union give-away allegation is the previously noted <em>NRO</em> blog posts, which have been shown to be erroneous. As drafted, the legislation bans the right to strike and does not give NATCA or other ATC unions any kind of veto power over policy or operational decisions&mdash;only the same degree of inclusion in discussions that they have in the Air Traffic Organization today.</p>
<p>What I find especially disturbing is the piece's misunderstanding (or misrepresentation) of what the proposed corporation actually is. It is not a government-sponsored enterprise (GSE) like Fannie Mae, as the piece claims. It would be a federally chartered private nonprofit corporation, analogous to the American Red Cross or federal credit unions. It would receive zero government funding, and its bonds would not be backed by taxpayers, only by the revenues that it generates from providing ATC services (just like private or public toll roads&mdash;or like utility companies).</p>
<p>Surprisingly for a conservative organization, CRC seems enamored of congressional micromanagement of what is basically a high-tech business. It repeats the NBAA line about the stakeholder board being "special interests" and opposes shifting governance from a gaggle of politicians to a board of directors reflecting the varied interests of all key aviation stakeholders. Congressional micromanagement doomed National and Dulles Airports to mediocrity when they were part of FAA and their budgets were specified in detail by congressional committees. Only when they were divested to a newly created nonprofit entity were those airports freed from micromanagement and enabled to self-finance major improvements by issuing revenue bonds. This was done, incidentally, by the Reagan Administration. CRC's article also misunderstands that the stakeholders would be nominated by groups like AOPA and A4A, but would not directly represent them. No board member could hold a position in or receive compensation from any aviation company or organization, and each would have a legally enforceable fiduciary duty to serve the best interests of the ATC corporation, not the entity that nominated them. This is a model that has performed superbly over the past 20 years for the corporatized nonprofit Nav Canada, which has won global awards as the world's best air navigation service provider (ANSP).</p>
<p>My friend Marc Scribner of the free-market Competitive Enterprise Institute has published a brief rebuttal to the CRC piece, explaining the AIRR Act's provisions prohibiting controllers from striking. Among other things, he notes that the bill extends to the ATC corporation the provisions of 5 USC 7120(f), which provides that in the event that the union carries out a strike, work stoppage, or slowdown, the union would be stripped of its "exclusive recognition status." He goes on to ask, "Is [CRC's] Allen suggesting that NATCA would risk its very existence in order to mount a highly dubious legal challenge to the law? If there is any evidence that NATCA has become suicidal, it's a well-kept secret." (<a href="http://cei.org/blog/no-airr-acts-air-traffic-control-reforms-do-not-grant-controllers-strike-powers">http://cei.org/blog/no-airr-acts-air-traffic-control-reforms-do-not-grant-controllers-strike-powers</a>)</p>
<p>It's dismaying to see a respected conservative organization, founded by Willa Johnson, a former official at both Heritage Foundation and Reagan's Office of Presidential Personnel, be so filled with anti-union animus as to fail to take into account any of the past 30 years of research on why ATC is a poor fit for a tax-funded bureaucracy and on the case for corporatization, as embraced by more than 50 countries. I write this as one whose first policy paper making this case was commissioned and published by the Heritage Foundation back in 1982.</p>
<p>Though these conservative attacks on the bill as a "union give-away" are factually incorrect, it might well clear the air on that issue if an amendment were added to the bill stating in simple, direct language that employees of the ATC Corporation will have no right to strike. Having no such hidden agenda, I cannot imagine that NATCA would object.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="d"></a>CBO's Misleading Scoring of ATC Corporation</strong></p>
<p>Supporters of converting the FAA's Air Traffic Organization into a self-supporting ATC Corporation nervously awaited the Congressional Budget Office's required scoring of the House T&amp;I bill that includes this transition. Their fears were realized when CBO released its 19-page report on March 9<sup>th</sup>.&nbsp; The headline number was the finding that the transition would add $19.8 billion to federal budget deficits through 2026.</p>
<p>Though I'm hardly an expert on the arcane subject of federal budget scoring, I quickly downloaded and read the 19-page report. It was immediately obvious what the problem is. Under the budget scoring rules that CBO must follow, it has to take a very literalist approach to this task. The FAA reauthorization bill in question, HR 4441 (the AIRR Act), is all they had to work with. Since the House Ways &amp; Means Committee has not yet written the tax title for this bill, CBO was required to assume that all existing aviation excise taxes would remain in place&mdash;even though new ATC user charges would fully pay for the corporation's capital and operating costs.</p>
<p>CBO then made things worse by assuming that the new, self-supporting corporation, "would effectively act as an agent of the federal government" in providing ATC services. Therefore, the report says, "fees charged by the proposed corporation should be recorded as federal revenues, and its expenditures should be classified as federal direct spending." Based on that bizarre assumption, CBO's projection factors in both the existing aviation taxes (which mostly support ATC provided by FAA) <em>and</em> the new ATC user fees. Nobody who supports corporatization&mdash;certainly not the airlines who are pushing hard for this change&mdash;would support this kind of double payment for ATC services. A4A's support, like that of Business Roundtable, is based on the aviation taxes being cut back by the same amount as the revenue produced by the ATC corporation's user charges.</p>
<p>OK, that is one huge distortion of reality. But how does CBO get from that <em>excess of revenue</em> to an increase in the federal budget deficit? Part 2 of this little budgetary game is that by assuming there would be net new "taxes" (the ATC fees plus the continued aviation taxes), CBO applied its standard calculation of the negative impact on revenue of "federal tax increases." This led to its estimate that "revenue from the fees collected by the corporation would be partially offset in the federal budget by a loss of income and payroll tax receipts equal to about 25 percent of the fees each year." And <em>that</em> is the source of the alleged deficit increase of $19.8 billion from 2020 through 2026.</p>
<p>Assuming Ways &amp; Means does its job and reduces aviation excise taxes by the amount needed for the capital and operating costs of the ATC Corporation, there would be no net "federal tax increase" and hence no negative impact on revenue from income and payroll taxes. As Jeff Davis noted in <em>Eno Transportation Weekly</em>, "the Congressional budget system is not really set up to handle legislation like Chairman Shuster's proposal to take air traffic control out of the federal government." This ridiculous scoring exercise beautifully illustrates that point.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="e"></a>Further Thoughts on the ATO's Assets</strong></p>
<p>In last month's issue I explained my reasons for thinking that the new ATC Corporation should not have to buy the assets used by the Air Traffic Organization: (1) because this is a re-organization of the existing ATO, not its purchase by an outside party; (2) because these are sunk costs for mostly obsolete assets that need to be replaced, and (3) because paying billions for these assets (which aviation users have already paid for via dedicated aviation excise taxes) would add significantly to the user charges they would have to pay going forward, for no good reason.</p>
<p>I got a number of emails from knowledgeable people, some agreeing and some opposing. The most interesting one was from George Donohue, who knows FAA from the inside, having served four years as Associate Administrator for Research and Acquisitions. Donohue is now Professor Emeritus of Systems Engineering at George Mason University, and his pre-FAA career included stints at DARPA and RAND Corporation. With his permission, I am sharing his comments with you:</p>
<blockquote>
<p>"I was a strong proponent of moving the ATC system out of the U.S. government when I was David Hinson's Associate Administrator. (It was one of the reasons he hired me, to make the move to the private sector, since none of the [other] FAA executives was in favor of the move.) It was one of the reasons that Vice President Gore got me the nomination to become the Deputy Administrator. . . . My book [<em>Terminal Chaos: Why U.S. Air Travel Is Broken and How to Fix It</em>, co-authored with Russell D. Shaver III, AIAA, 2008] made a point of this necessity to achieve modernization. I was making this point to the NAS committee that reviewed NextGen [in 2015] and got some of this language into the final report. In my recent interview with GAO [on transition issues], I told them that my estimate was that the current ATC assets were worth zero! The computers are mostly beyond a six-year maximum economic lifespan, the Centers should be reduced from 20 to fewer than six (sell the land), the ADS-B system is not owned by the FAA (but paid for as a service), the primary radars are now mostly used for a national and homeland defense security requirement that the government should pay for in any case, and NextGen digital data links will be privately owned and operated (as a service like ADS-B). Most of the new infrastructure is not owned by the U.S. government because there has been no funding to purchase it, and the FAA has had to out-source the new systems to the private sector anyway."</p>
</blockquote>
<p>I think his perspective says a great deal.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="f"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">FAA Cheating Scandal Emails Are Missing</span>. In response to a lawsuit filed by would-be air traffic controllers protesting alleged assistance to help some applicants cheat on the Biographical Assessment, the FAA on February 29<sup>th</sup> filed a motion in Federal District Court in Arizona to dismiss a congressional Freedom of Information Act request to release emails between FAA employees accused in the lawsuit. FAA had turned over some of the emails but withheld 181 documents, which it now says are unrecoverable. Attorney Michael Pearson, who is representing applicants who are suing the agency, told Fox Business that "It's obvious to me they are hiding embarrassing information." (Note: for background on this story, see my article "New Revelations re FAA's Revised Controller Hiring," <em>ATC Reform News</em>, June 2015.)</p>
<p><span style="text-decoration: underline;">Control Tower Competition Increasing in U.K.</span> Air Navigation Solutions Ltd. completed its takeover of control tower operations at London Gatwick Airport at midnight on Feb. 29<sup>th</sup>. The company, a subsidiary of DFS (the German air navigation service provider), won the competition last year against incumbent provider NATS (the U.K.'s ANSP). The contract is for 10 years. Gatwick is the world's busiest single-runway airport.</p>
<p><span style="text-decoration: underline;">More Newspapers Endorse ATC Corporatization</span>. Last month two more leading newspapers endorsed corporatization of the U.S. air traffic control system. <em>USA Today</em> (March 2<sup>nd</sup>) concluded its thoughtful editorial by saying, "Despite [various] concerns, if a spinoff could improve the system without costing passengers more or silencing the public's voice in air traffic control, it would be worth doing." The <em>Denver Post</em> followed up (March 12<sup>th</sup>) noting that the House proposal is not "privatization" as charged by opponents, and concluded by saying, "Most other advanced countries already separate air traffic control from the regulation of safety. The U.S. would do well to follow suit."</p>
<p><span style="text-decoration: underline;">Dominican Republic Opts for GPS Landing System</span>. The leading airport in tourism-oriented Dominican Republic, Punta Cana International Airport, will soon be equipped with Honeywell's Ground-Based Augmentation System (GBAS), the world's only FAA-certified GPS landing system. GBAS is far more cost-effective than a traditional instrument landing system (ILS), and is either operational or under way at 15 major airports worldwide, including Bremen, Frankfurt, Houston, Newark, Shanghai, Sydney, and Zurich.</p>
<p><span style="text-decoration: underline;">Air Force Won't Meet 2020 Deadline for ADS-B Equipage</span>. On March 1<sup>st</sup>, USAF officials told a House committee hearing that it will be unable to meet the FAA's 2020 deadline for equipping U.S. aircraft with ADS-B equipment (which continuously broadcasts the aircraft's position, heading, etc.). Because military transports and tankers make the greatest use of civil airspace, they will be equipped first, but even the fleet of C-130 transports will not all be equipped by 2020, said Lt. Gen. Mike Holmes. The total cost to equip all military aircraft, he said, is $5.6 billion, of which USAF's portion is $4.4 billion&mdash;and the agency says it is $1.2 billion short of that sum.</p>
<p><span style="text-decoration: underline;">Two Pilots' Unions Endorse ATC Corporatization</span>. Two large airline pilots unions have endorsed the House FAA reauthorization bill that includes converting the FAA's Air Traffic Organization into a federally chartered nonprofit ATC corporation. Both the Allied Pilots Association (15,000 American pilots) and the Southwest Airline Pilots Association (8,000 Southwest pilots) endorsed the bill in March. The stakeholder board proposed in the bill calls for one seat to be nominated by pilots' unions.</p>
<p><span style="text-decoration: underline;">Common ATC Upgrade Making Headway in Europe</span>. A group of European ANSPs had formed an alliance to procure common air traffic management software. The latest ANSP to join the iTEC Alliance is Norway's Avinor, a pioneer in remote tower implementation. Founding members include DFS (Germany), ENAIRE (Spain), LVNL (Netherlands), and NATS (UK), along with systems provider Indra. Both Oro Navigacia (Lithuania) and PANSA (Poland) have also expressed interest in joining.</p>
<p><span style="text-decoration: underline;">IATA Endorses U.S. ATC Corporatization</span>. Speaking at the Wings Club in New York, the head of the International Air Transport Association, Tony Tyler, called for faster modernization of the U.S. air traffic control system. Calling the present system inefficient and incapable of cost-effective modernization, he concluded that "We support legislation to modernize the system through the creation of an independent, corporatized nonprofit entity to perform these services."</p>
<p><span style="text-decoration: underline;">Wide Area Multilateration for Two Colombian Airports</span>. Saab announced on March 30<sup>th</sup> that it has been selected by Aeronautica Civil de Colombia to provide Wide Area Multilateration (WAM) and ADS-B surveillance for the airports at Cucuta and Medellin. This combination of technologies is a more-precise and cost-effective alternative to ground-based radar, and will improve surveillance at the airports in in the non-radar airspace between them.</p>
<p><span style="text-decoration: underline;">HungaroControl Goes to All Free-Route Airspace</span>. Hungary's corporatized HungaroControl last year became the first ANSP in Europe to abolish all fixed air routes in favor of free-route airspace. This enables aircraft operators to select the shortest route from entry point to exit point of Hungarian airspace. With the one-year anniversary celebrated last month, the ANSP reports that it maintained safety performance in 2015 despite a 13% increase in traffic. Airlines that previously routed around Hungarian airspace due to lack of direct routes are now routing over Hungary. HungaroControl estimates that as more airlines do this, they will save an aggregate 1.5 million kilometers per year, with associated fuel savings.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="g"></a>Quotable Quotes</strong></p>
<p>"The FAA performs a minor miracle each day by keeping planes on 80,000 flights from running into one another. Managing change, however, isn't the agency's core competency. The FAA's Kafkaesque bureaucracy is so constricting that a former Administrator once privately complained that he lacked the authority to hire a secretary. Not a deputy secretary or an assistant secretary: a regular secretary to answer the phone."<br /> &mdash;Roger Cohen, "Why Upgrading Air Traffic Control Is Stuck in a Holding Pattern," <em>The Wall Street Journal</em>, March 27, 2016</p>
<p>"Many [U.S.] administrations have attempted to develop and implement new technologies to improve the flow of aircraft through the nation's skies and around ever more gridlocked airports. All have failed. Yes, there continues to be opposition to the idea of spinning off air traffic control into a government-chartered non-profit operating company governed by a board of federal experts and industry appointees. But never before has the United States with its hugely complex air traffic environment stood to gain so much from the heartening momentum for change. Some say the FAA has become the laughing stock of the global air traffic management industry, notorious for chronic false starts, delays, missed deadlines, and scant comprehension of what is either needed or possible. . . . Failure to embed the correct institutional framework will, however, only lead back to an inflexible, sclerotic regime where vested interests represent the primary obstacle to change."<br /> &mdash;Aimee Turner, "Future Proofing," <em>Air Traffic Management</em>, Quarter 1, 2016</p>
<p>"I just wanted to briefly put on the record. I have studied the I.G. and GAO reports on the dysfunction, on NextGen, and we have a crisis in air traffic control in this country in terms of how far behind we are. And I just want to urge the Chairman and Ranking Member to continue to work on this. I don't know what the right answer is. I'm not trying to say that what's been proposed in the House is something I'm in favor of or is the right idea, but I do know we are ignoring a serious issue in our air traffic control, probably more serious than cyber-attack and much more serious than many other issues that we are tackling in this reauthorization. So I just wanted to put on the record that I'm happy to work with anyone to try to move forward, because as somebody who studies the I.G. and GAO reports, it's not a pretty picture right now. And we need to get busy and try to see if we can figure out a way forward."<br /> &mdash;Sen. Claire McCaskill, (D, MO), Senate floor, March 16, 2015 (<em>AIN Online</em>)</p>
<p>"More than 50 other nations have moved to this concept in one form or another&mdash;some decades ago. And none of them have chosen to reverse course or opted to return to their previous systems. Indeed, while the U.S. will be one of the last major countries to change, it will have the distinct advantage of being able to adopt the best practices of those before us to ensure a smooth and seamless transition. . . . The plan on the table is not one to change technology or direction, but rather a plan to assure steady, long-term financing and to lift constraints on moving forward with NextGen more quickly and decisively."<br /> &mdash;Doug Parker, CEO American Airlines, remarks at U.S. Chamber of Commerce Aviation Summit, March 22, 2016</p>
<p>"John Crichton, the [<em>Aviation Week</em>] Laureate in Civil Aviation, has been at the forefront of an international movement to shift air traffic management from government bureaucracies to customer-focused, technologically nimble, independent organizations. . . . During his tenure, Nav Canada has become a pioneer in the use of Automatic Dependent Surveillance &ndash; Broadcast (ADS-B) and made significant improvements in the transatlantic corridors that it manages, the busiest oceanic airspace in the world. Nav Canada was cited in recent congressional hearings as a model for what might be done with the FAA's Air Traffic Organization. It has also influenced air traffic management beyond its borders through the export of technology to other countries. With Crichton at the helm, Nav Canada helped spur the development of Aireon, which is working to make use of satellites to offer global coverage of remote oceanic airspace."<br /> &mdash;James Asker, "Air Traffic Innovator," <em>Aviation Week &amp; Space Technology</em>, March 28-April 10, 2016</p>
<p><a href="#top">&raquo; return to top</a></p>1014505@http://www.reason.orgTue, 05 Apr 2016 12:38:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #131http://www.reason.org/news/show/air-traffic-control-newsletter-131
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">Reactions to the ATC Corporation bill</a></li>
<li><a href="#b">Fine-tuning the governance model</a></li>
<li><a href="#c">The "union giveaway" canard</a></li>
<li><a href="#d">Paying for the ATC assets?</a></li>
<li><a href="#e">GAO on transition questions</a></li>
<li><a href="#f">Why Democrats should support ATC corporatization</a></li>
<li><a href="#g">News Notes</a></li>
<li><a href="#h">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>Reactions to ATC Corporation Bill</strong></p>
<p>"The reports of my death have been greatly exaggerated," Mark Twain famously said. And so it is with last week's news about the FAA reauthorization bill passed by the House Transportation &amp; Infrastructure on February 11<sup>th</sup>. When House leadership and T&amp;I Committee leaders decided last week there was no chance of even the House (let alone the Senate) completing work on the bill by the March 31 expiration date for FAA's current authorization, they announced the near-term priority of enacting another extension. Opponents of corporatization immediately spun this as abandoning the AIRR Act; I must have counted six headlines to that effect, all of them wrong. Chairman Shuster has said repeatedly that the major change represented by Title II's conversion of the FAA Air Traffic Organization into the self-supporting ATC Corporation needs to be more fully explained and better understood before it goes to the House floor.</p>
<p>My expertise is not in legislative strategy, but it strikes me as unrealistic for anyone to have expected that a change equal in magnitude to 1978's airline deregulation could zip through the House and be embraced by the Senate in a matter of weeks. In a thoughtful editorial in its Feb. 15-28 issue, <em>Aviation Week</em> supported separating ATC from safety regulator FAA as being long overdue, but urged lawmakers and aviation stakeholders to "get the details right." It added the following good advice:</p>
<blockquote>
<p>"Probably no measure would win unanimous agreement among all stakeholders. But Congress needs to slow things down if it is to bring as many on board as possible. The risk in not doing so is that opponents could kill the proposal. And then the U.S. would remain an outlier to what has become a global aviation best practice."</p>
</blockquote>
<p>I was also encouraged by the <em>Washington Post</em>'s thoughtful editorial endorsement of the idea on Feb. 11<sup>th</sup>, headlined "The Government Should Get Out of the Air Traffic Control Business." But it, too, cautioned Congress and aviation stakeholders to get the details right. "Much will depend on ensuring that the new air traffic entity avoids the governance flaws that left [Amtrak and the Postal Service] still unduly dependent on Congress."</p>
<p>It is with these thoughts in mind that this issue of <em>ATC Reform News</em> offers perspectives and suggestions for fine-tuning a worthy and much-needed reform proposal.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="b"></a>Fine-Tuning the Governance Model</strong></p>
<p>As one of four witnesses at the T&amp;I Committee's February 10<sup>th</sup> hearing on the AIRR Act, I sat through three and a half hours of pro and con discussion, mostly about the proposed ATC Corporation. A repeated theme by opponents was that the proposal would turn the ATC system over to a board "dominated by the big airlines," as NBAA's Ed Bolen claimed. This theme was repeated by many of the Democratic members of the Committee. Even highly respected airline pilot Capt. Chesley Sullenberger told <em>Politico</em> he was worried that the proposal would give "unparalleled power to commercial airlines."</p>
<p>This assessment misunderstands the Nav Canada governance model which the bill aims to replicate. Those appointed to the board by various stakeholder groups (and by the DOT Secretary, representing the public) will not themselves be employees of any aviation company, union, or trade association. They will be legally required to owe a fiduciary duty to the best interests of the ATC Corporation, not the parochial interest of whoever appointed them. Nav Canada's board includes several retired airline officials, to be sure, but also people from other industries with significant technical, financial, and managerial knowledge.</p>
<p>That said, this legislation will be shaped by politics. And in politics, <em>optics matter</em>. If it is perceived that the "big airlines" will control four seats on the 11-member (original) or 13-member (as amended) board, that perception could doom the proposal politically. One way to address this problem would be to change who appoints the justified number of members nominated by fee-paying customers. Several Democratic members at the hearing pointed out that regional airlines account for nearly half of daily airline departures. Even though nearly all such carriers have direct contractual relationships with major airlines, their interests in airspace access and other issues are not identical with those of the majors. Cargo carriers also have somewhat different interests. So there could be benefits in having, say, two of the four paying-customer seats appointed by A4A, one by the Regional Airline Association, and one by the Air Cargo Association.</p>
<p>Another key aviation stakeholder that should be considered is the airport community. Airports play a vital role in the system&mdash;and in NextGen. In my opinion, they are a more appropriate player to be part of the ATC Corporation's governing body than technology companies, whose trade association Aerospace Industries Association was added to the stakeholder board nominators during the bill's mark-up. The corporation's board should be free to make any trade-offs it wishes about in-house vs. contracted technology development, and that would appear to be in conflict with having an AIA designee on the governing board, as opposed to the Advisory Board. Airports would also be another voice (along with three GA appointees) supportive of full airspace access for small-community airports&mdash;also a topic that came up repeatedly during the Feb. 10 hearing.</p>
<p>Another subject raised at the hearing was the Department of Defense. DoD provides ATC services to airlines and other non-military users in portions of the airspace, and the ATO likewise provides some service to military flights. The bill exempts military flights from paying ATC fees, and retains current law on DoD involvement during a declared war or national emergency, but it might be worth considering a DoD seat on the governing board (as opposed to the Advisory Board, as in the current bill).</p>
<p>I think it's clear that the governance model needs further thought and fine-tuning as the bill moves forward.<s></s></p>
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<p><strong><a name="c"></a>The "Union Give-Away" Canard</strong></p>
<p>Some conservatives have gotten it into their heads that the ATC Corporation proposal must be a bad thing because the controllers' union, NATCA, has endorsed it. First out of the box on this was <em>The Daily Caller</em>, with a piece headlined "Hot AIRR: Fake Privatization for Air Traffic Controllers." A more substantive piece followed, by economist Diana Furchtgott-Roth on <em>National Review Online</em>, "Privatize Air Traffic Control? Not If It's a Union Giveaway." When Chairman Shuster published a response on <em>NRO</em>, she wrote a follow-up piece, "Air Traffic Control Needs Real Privatization," repeating some of the same concerns about the bill giving unions increased control over the provision of air traffic control.</p>
<p>The four most important claims in these pieces are as follows:</p>
<ol start="1" type="1">
<li>No prohibition on ATC Corporation employees engaging in strikes;</li>
<li>Controllers would set their own pay scales;</li>
<li>The unions would get a new tool in the form of binding arbitration; and,</li>
<li>Reforms of any substance could not be achieved without union approval.</li>
</ol>
<p>Not being an expert on aviation law, I turned to someone who is. David Grizzle was formerly Chief Counsel of FAA and later served as the Chief Operating Officer of its Air Traffic Organization. In a letter responding to Furchtgott-Roth's second article, Grizzle addressed all four of these points.</p>
<p>On the strikes question, Grizzle points out that the bill makes key portions of Title 5 of the US Code applicable to the new corporation including a provision that makes it an enforceable unfair labor practice for a union to call, participate in, or fail to stop a strike. Management can obtain a court order to stop such a strike, and the union can lose its status as the employees' representative. Employees would not have any of the strike rights provided to private firms under the National Labor Relations Act.</p>
<p>On pay scales, the bill very sensibly would keep in force any existing union contracts <em>until they expire</em>, at which point the union and management would negotiate a new contract. The Corporation would have opportunities to modernize pay, benefits, work rules, etc.</p>
<p>Binding arbitration already exists for controllers and other FAA unions, so this provision merely retains the status quo; it is not a new tool. Arbitrators are picked from a qualified pool of private-sector professionals, and the unions will <em>not</em> pick two out of three, as alleged.</p>
<p>Finally, union approval of changes is not required. The bill calls for "conferring" and "collaboration" with unions, not granting them veto power. This is a serious intention of building a more collaborative organizational culture, like what has emerged within Nav Canada. And even within the existing FAA, such practices do not constitute veto power, as David Grizzle explains:</p>
<blockquote>
<p>"Numerous times when I was Chief Operating Officer, I consulted with unions and my front line management regarding a decision I needed to make, and sometimes I made exactly the opposite decision from what the unions had advocated. But I felt that I was on more solid ground for having sought their insight."</p>
</blockquote>
<p>This would be even more the case in a fresh, new, non-civil-service organizational culture.</p>
<p>Any realistic transition of a large workforce from a government agency to a new kind of organizational structure must preserve existing pay and benefits during the transition period. In a stakeholder-governed co-op structure that seeks to emulate the Nav Canada model, gaining the trust and cooperation of employees on whom service delivery depends makes very good sense. And of course politically, it is also the smart and sensible thing to do.</p>
<p>Conservatives should rejoice that an important labor union agrees that the FAA status quo is unsustainable and that this high-tech, 24/7 service business is more appropriate to a self-funded corporation business model. And that said union is willing to stand up and be counted in favor of this kind of far-reaching reform.</p>
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<p><strong><a name="d"></a>Paying for the ATC Assets?</strong></p>
<p>In a joint statement shortly before the Feb. 10<sup>th</sup> hearing, the T&amp;I Committee's Ranking Member Peter DeFazio (D, OR) and Aviation Subcommittee Ranking Member Rick Larsen (D, WA) railed against the ATC Corporation proposal on several grounds, including that "It hands over a public asset worth billions of dollars to a private corporation for free." This point was repeated by a number of Members during the hearing itself.</p>
<p>I think this concern is mistaken, for at least three reasons. First of all, this is <em>not</em> a "privatization" of the ATC system, despite opponents' characterization of it as that. The day before the transition and the day after, nearly all the same people (except for top management) will be in place doing the same jobs, using the same technology and procedures, in the same facilities. What will differ is the funding and the governance. The ATO is not being sold to the highest bidder from the aerospace industry, nor are its operations being contracted out. The day before the transition, the ATO is part of a federal agency. The day after the transition, it's a federally chartered nonprofit corporation, charged with carrying out the same vital 24/7 function. This is a reform-in-place, not a "privatization." There are no shareholders who would profit by acquiring these assets.</p>
<p>Second, the number $53 billion was thrown around a number of times at the hearing, without any documentation of how it was arrived at. It might be conceivable that if you added up all the ATC-related facilities and equipment spending over the last 30 or 40 years, you could come up with that number. But that is neither here nor there: that's a <em>sunk cost</em>. Given the advanced age of many of the centers, towers, and TRACONs, it is not clear that their depreciated value&mdash;in real terms&mdash;is much above zero. And except for a few very recent investments, a large fraction of the technology in the system is obsolescent if not obsolete. These problems are one of the key reasons to reform the ATC system, disconnecting it from the federal budget and enabling it to issue long-term revenue bonds for modernization, as airports do.</p>
<p>Third, all those F&amp;E investments have come from the Airports &amp; Airways Trust Fund. The money in that fund comes entirely from aviation user tax collections, <em>not</em> from general taxpayers. Those users are the same ones who will be paying the user fees to the ATC Corporation. If you put any dollar value on the existing assets&mdash;say (generously) $10 billion&mdash;that becomes an extra cost added to the Corporation's rate base, needing to be recovered from the new user fees. That's in addition to the remaining tens of billions of projected NextGen and facility replacement costs over the next two decades. Why would anyone want to do this? Demanding that the users pay a second time for obsolete assets is a kind of poison pill that would make successful ATC modernization that much harder.</p>
<p>In addition, like other corporatized ANSPs, the Air Traffic Corporation will be taking on many liabilities of the ATC system, not just its assets. But unlike the FAA, which is "self-insured" by the American taxpayer, the Corporation will have to purchase liability insurance in the open market. An objective estimate of both assets and liabilities to be taken on by the Corporation could well end up with a negative net worth.</p>
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<p><strong><a name="e"></a>GAO Highlights Transition Questions</strong></p>
<p>The Government Accountability Office released its new report, "Preliminary Observations of Potential Air Traffic Control Restructuring Transition Issues," (GAO-16-386R) on Feb. 10<sup>th</sup>, the day of the hearing on the AIRR Act. It had been requested by Ranking Members DeFazio and Larsen, and it appears that they were the only ones at the hearing who knew what was in it. DeFazio held up the report, noted that GAO had consulted 33 (actually 32) experts in preparing it, and implied that it raised many unresolved questions about corporatization.</p>
<p>In fact, as article in <em>Eno Transportation Weekly</em> (Feb 18<sup>th</sup>) explained, Title II of the AIRR Act anticipates most of these concerns and provides answers, though those answers may not suffice for some critics.</p>
<p>On funding and financing, GAO noted that the new entity would have to develop a system of ATC fees and charges that would recover all the capital and operating costs of the system, as well as deciding which costs would be borne by which users. It noted that a stakeholder board, <em>a la</em> Nav Canada, might obviate the need for external rate regulation&mdash;which is the approach taken in the bill, but with an appeal to the DOT Secretary also provided for. GAO also explained that in the aftermath of the collapse in air traffic following the 9/11 attacks, although brand-new NATS ended up needing a bailout, Nav Canada did not. Instead, it temporarily raised its rates and also drew on its reserve fund.</p>
<p>On asset valuation and transfers, GAO acknowledges that there are arguments on either side of whether the assets should be "purchased," and notes that any such purchase would require higher fees to be paid by system users.</p>
<p>On the separation of safety regulation from ATC operations the report highlights the view of one expert (out of 32) raising concerns about how to separate activities like development of flight standards and another single-expert concern that developing and implementing new ATC procedures might be more difficult if FAA and the ATO were separate organizations. I was disappointed to see two key omissions in this discussion. There was no mention of the large amount of real-world experience to draw upon, given that some 60 countries have carried out this separation over the last two decades. In addition, there was no mention of the FAA-commissioned MITRE Corporation report that found improved safety and satisfaction with the change in six major developed countries that have carried out this separation.</p>
<p>On potential impacts to airspace users, GAO mentions that new user fees for general aviation (GA) operators might lead to less GA flying and that small and rural communities might be negatively affected. But as the Eno newsletter points out, the AIRR Act explicitly exempts GA and non-commercial (i.e. not for-hire) business aviation from any user fees, and that Chairman Shuster interprets the bill as keeping the airspace as a public asset and prevents the Corporation from restricting its use. There was a lot of discussion of this subject during the hearing, and there might be a need for fine-tuning the language to make these provisions explicit.</p>
<p>Finally, on the time needed for transition, GAO found most experts agreeing that the Nav Canada experience (as the world's second-largest ANSP) provided evidence that a one to two year organizational transition and two years to phase in user fees were reasonable estimates. And Eno notes that the bill provides an overall three-year transition.</p>
<p>In short, GAO pretty well covered the subject, and the bill itself addresses most of the transition issues reasonably well. As both <em>Aviation Week</em> and <em>The Washington Post</em> advised, though, it's important to get the details right, rather than rushing to get something enacted.</p>
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<p><strong><a name="f"></a>Why Democrats Should Support ATC Corporatization</strong></p>
<p>I'm troubled by the fact that, so far, support and opposition to corporatization of air traffic has divided along party lines, with Republicans for and Democrats against. This goes against most of the history of this idea, in which Democrats have been far and away the leaders in aviation policy reform.</p>
<p>The Airline Deregulation Act of 1978 was championed by the Carter Administration, after its appointee, economist Alfred Kahn, had liberalized airline regulation administratively. Advocacy of the bill was led by the late Sen. Ted Kennedy (D, MA) and his counsel, Stephen G. Breyer (today a Supreme Court Justice).</p>
<p>The Clinton Administration appointed a National Airline Commission in 1992, and its 1993 report recommended a government ATC corporation that could issue revenue bonds. Separately, Vice President Gore's National Performance Review, charged with reinventing government, singled out the corporatization of ATC in New Zealand (in 1987) as a model the United States should emulate. That led to DOT Secretary Pena creating an Executive Oversight Committee that produced a two-volume <em>Air Traffic Control Corporation Study</em>, released in May 1994. That led to 1995 legislation, introduced by Rep. Norm Mineta and supported by FAA Administrator David Hinson, to create the U.S. Air Traffic Services Corporation. When that bill failed to pass, Clinton and Congress appointed the National Civil Aviation Review Commission, chaired by Norm Mineta. Its 1997 report called for pulling together all the ATC functions within FAA as a "performance based organization," funded by ATC fees and with the ability to issue revenue bonds.</p>
<p>Dorothy Robyn was the Clinton White House infrastructure expert during the second term. She worked on those issues and became convinced that the Gore assessment was correct&mdash;that "Air traffic management is a 24/7 'business' trapped in a regulatory agency that is constrained by federal budget rules, burdened by a flawed funding mechanism, and micromanaged by Congress and the Office of Management &amp; Budget," as she wrote in an excellent piece that appeared on Feb. 9<sup>th</sup> on <em>RealClearPolicy</em>, "Corporatize Air Traffic Control: A Democrat's Case."</p>
<p>There are many other Democrats in aviation who understand these points, but have not spoken out recently. One who has is Bob Crandall, former CEO and Chairman of American Airlines. When the <em>New York Times</em> published a poorly-researched editorial (Feb. 15<sup>th</sup>) arguing against ATC "privatization," Crandall sent them a hard-hitting letter to the editor, which they declined to publish. He posted "Wrong on This One" on his blog, <em>Bob Crandall Thinks . . .</em>, on Feb. 21<sup>st</sup> and I commend it to your attention. (<a href="http://www.bobcrandallthinks.blogspot.com">www.bobcrandallthinks.blogspot.com</a>)</p>
<p>I will close with an excerpt from Dorothy Robyn's piece, while encouraging you to download and read the whole thing:</p>
<blockquote>
<p>"Democrats should not treat this as a principled fight over 'privatization.' Controllers support the Shuster bill because they like Canada's user co-op approach to air traffic management, which rewards productivity and involves controllers intimately in the technology modernization process. Aircraft operators and consumers also benefit. Had Nav Canada existed in 1995, I suspect it, rather than New Zealand's government corporation&mdash;the best model at the time&mdash;would have been the prototype for the Clinton Administration's corporatization proposal. With the problems that prompted that proposal having only gotten worse over the last 20 years, an idea that made sense then should be even more compelling now."</p>
</blockquote>
<p>(<a href="http://www.realclearpolicy.com/blog/2016/02/09/corporatize_air_traffic_control_a_democrats_case_1549.html">www.realclearpolicy.com/blog/2016/02/09/corporatize_air_traffic_control_a_democrats_case_1549.html</a>)</p>
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<p><strong><a name="g"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">Singapore Signs Up for Space-Based ADS-B</span>. The Civil Aviation Authority of Singapore is the latest air navigation service provider (ANSP) to sign up for space-based ADS-B surveillance being offered by start-up company Aireon. CAAS will be the first ANSP in the Asia-Pacific region to make use of the service, which will be operational in 2018 after the entire new constellation of Iridium-Next satellites is launched during 2016 and 2017. The Singapore FIR extends to a 110-mile radius around the nation.</p>
<p><span style="text-decoration: underline;">NATS En-Route Charges, Update</span>. In its 10-page paper on the "costs of privatizing air traffic control," Delta Airlines claimed that "in the United Kingdom ATC operational costs increased 30 percent," compared with a six percent increase in U.S. ATC costs. The UK provider, NATS, reports that "from CY 2002 to CY 2016, UK en-route prices have risen by 39%," but "after taking account of inflation, this represents a real increase of 2% (i.e., virtually unchanged over 14 years)." Meanwhile, as reported by the DOT Inspector General, FAA's operations budget has increased by 108% between 1996 and 2012.</p>
<p><span style="text-decoration: underline;">Crichton Honored by <em>Aviation Week</em></span>. At its annual Laureate Awards, presented in Washington, DC on March 3<sup>rd</sup>, Nav Canada's just-retired CEO John Crichton was one of four awardees in the Commercial Aviation category for "extraordinary achievements and significant, broad-ranging progress in aviation, aerospace, and defense." Congratulations are in order for this well-deserved award.</p>
<p><span style="text-decoration: underline;">Moody's Upgrades Nav Canada's Bond Rating</span>. Moody's Investors Service announced on February 10<sup>th</sup> that it was increasing Nav Canada's senior unsecured rating to Aa2 from Aa3. Moody's also reaffirmed the Aa2 level of the company's base line credit assessment and its senior secured rating. It said that these actions reflect the company's "strong operating and financial performance over the past few years. The performance is underpinned by sustained aeronautical traffic growth." Since 2010, "Nav Canada was able to meet all its obligations (including pension plan related obligations) without any rate increase (there has not been any rate increase in over 11 years)."</p>
<p><span style="text-decoration: underline;">Tower Competition Widespread in UK</span>. In December 2015, the UK's Civil Aviation Authority announced that it expects the UK to become the first country in the European Union with a competitive market in terminal air navigation services (i.e. control towers). UK airports have long been free to either self-provide their control towers or to contract with NATS or other providers. But this market has not, in fact, been very competitive. That seems to be changing, with the emergence last year of Birmingham Airport Air Traffic Ltd. BAATL was the result of that airport's decision to self-provide tower service, and now that it is fully operational, it plans to seek business elsewhere in the UK&mdash;and in Europe.</p>
<p><span style="text-decoration: underline;">Southwest Pilots Endorse ATC Corporation Bill</span>. On February 25<sup>th</sup>, the Southwest Airlines Pilots Association announced its support for the AIRR Act, as approved by the House Transportation &amp; Infrastructure Committee the previous week. The SWAPA statement applauded the measure's "bold and significant steps to separate the FAA's air traffic controllers from the federal bureaucracy that has deprived them of the tools to best do their job. Freeing ATC from the FAA will allow the agency to concentrate on its core mission of safety."</p>
<p><span style="text-decoration: underline;">Remote Tower Demonstrations Included in FAA Bill</span>. The AIRR Act calls for the FAA to deploy and oversee remote tower demonstration projects at seven U.S. airports, including one non-hub airport, three non-primary airports with existing control towers, and two airports with contract towers. It also calls for two non-hub airports with remote towers to share a single remote-tower center, if possible, "to assess the benefits and efficiencies of consolidating such facilities."</p>
<p><span style="text-decoration: underline;">Large Remote Tower Implementations Under Way in Europe</span>. Ireland and Norway have major remote tower deployment projects under way. Starting in the second quarter of this year, the Irish Aviation Authority will begin controlling traffic at Cork and Shannon Airports from a new remote tower center at the Dublin tower. Norwegian ANSP Avinor last month announced an expanded plan for a network of remote tower services for many of the 46 airports where it provides towers. The first phase, already under development, calls for 15 facilities to be managed from a new remote tower center in Boda. The first of the new remote towers, and the Boda center, are expected to be commissioned in 2017, according to <em>Airports International</em>.</p>
<p><span style="text-decoration: underline;">Cato Institute on Reforming ATC</span>. Cato's Chris Edwards has released an excellent three-page brief on the case for shifting ATC from the FAA to a self-supporting ANSP model. "Reforming Air Traffic Control" is issue No. 74 of Cato's <em>Tax &amp; Budget Bulletin</em>, released in February. (<a href="http://www.cato.org/publications/tax-budget-bulletin/reforming-air-traffic-control">www.cato.org/publications/tax-budget-bulletin/reforming-air-traffic-control</a>)</p>
<p><span style="text-decoration: underline;">4-D Trajectories Platform Introduced by NATS</span>. In January the UK's ANSP introduced its new upper-airspace management system, iTEC, at its Prestwick Control Center in Scotland. It will be phased into operation for all Scottish upper airspace by early summer and will enter service at the other NATS center (Swanwick) thereafter. The system, developed collaboratively by NATS and Indra, is designed to be interoperable throughout Europe and to support 4-D trajectory-based operations. It will fully replace the previous system for all NATS upper airspace over a five-year period.</p>
<p><span style="text-decoration: underline;">Feedback from Last Issue: ATC Billing System</span>. Reader Grant Wilson at IATA headquarters in Montreal pointed out that in addition to several ATC billing systems that are commercially available, the FAA itself has a billing system in place to handle overflight fees. The new ATC Corporation would continue to charge overflight fees, so one option for its billing would be to expand that system, rather than signing up for one of the commercial services. That would be a decision for its board to make.</p>
<p><span style="text-decoration: underline;">Feedback from Last Issue: Controller Staffing</span>. Atlanta Center controller Jim Winton provided numbers to document claims that this vital facility is understaffed, not overstaffed, and that the problem is even worse at the Atlanta TRACON, where 6-day work weeks have become commonplace.</p>
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<p><strong><a name="h"></a>Quotable Quotes</strong></p>
<p>"By removing the [ATC] function from the clutches of government budget restraints and politically-driven appropriators, Nav Canada has been able to rapidly upgrade its technologies and practices and to implement those with considerable success. Meanwhile, the FAA has become the laughingstock of the global air transportation management world for its chronic false starts, delays, missed deadlines, and misunderstandings of what's actually needed or possible in terms of air traffic control modernization. Meanwhile, ATC inefficiency&mdash;and the chronic flight delays that are partly the result of that inefficiency&mdash;has gotten significantly worse over the last 20 years despite a near-doubling of federal money spent on it each year."<br /> &mdash;Dan Reed, "Air Traffic Control Privatization Finally Has a Realistic Shot at Being Passed by Congress," <em>Forbes.com</em>, Feb 5, 2016</p>
<p>"User-funded, user-accountable entities are far more capable of delivering innovation and timely improvements in a cost-effective manner than government agencies. By drawing upon the positive experiences of dozens of nations that have freed their air traffic control enterprises from the stifling grip of bureaucracies, Chairman Shuster's framework has much greater promise of fulfilling the objectives of NextGen. If this framework is properly developed into legislation and implemented, consumers will experience fewer travel delays, the movement of goods will become more efficient, aircraft will burn less fuel, air safety margins will increase, capacity will expand, responsiveness and transparency will improve, political micromanagement will recede, costs will be easier to control and sustain, and the economy could experience tens of billions of dollars in growth."<br /> &mdash;Pete Sepp (National Taxpayers Union), "An Open Letter to Congress: It's Time to Modernize Air Traffic Control," Feb. 9, 2016 [letter co-signed by 12 policy researchers at center-right think tanks, including AEI, CEI, Hudson, NCPA, Reason, R Street, and Taxpayers for Common Sense]</p>
<p>"I object strenuously to characterizing this as giving <em>taxing</em> authority. A tax is something only government can do, and I agree with Mr. Bolen on that point. But let me give you an example. The government owns a utility called the Tennessee Valley Authority. It sends electric bills every month to its customers for the services that they purchase. Similarly, a federally chartered nonprofit air traffic corporation would send bills to its customers for the services that it delivers to them. That is a charge, just like an electricity bill. It is not a tax in any way, shape or form, legally or in any common-sense interpretation. So I think this is really distorting the reality of what is proposed here. It is proposing to create a nonprofit utility, not a taxing agency."<br /> &mdash;Robert Poole, speaking at the House Transportation &amp; Infrastructure Committee hearing, Feb. 10, 2016</p>
<p>"The U.S. needs to re-open the possibility that one site (with a possible back-up) could be the control point for all high-altitude contiguous United States (CONUS) traffic. All the aircraft are on instrument flight rules (IFR) flight plans, which are 4-dimensional trajectories (4DT) so they are in a Trajectory Based Operations (TBO) environment. Aided by an advanced automation platform, the 'controllers' monitor aircraft compliance and facilitate handoffs to/from the low-altitude conventional control facilities. The potential in this concept comes from two dimensions; 1) it does not necessarily depend on new avionics on the aircraft and 2) it can radically reduce the number of controllers needed to manage the en-route airspace."<br /> &mdash;Frank L. Frisbie and James H. Cistone, "Controller Productivity by the Numbers," <em>The Journal of Air Traffic Control</em>, Winter 2015</p>
<p><a href="#top">&raquo; return to top</a></p>1014475@http://www.reason.orgThu, 03 Mar 2016 08:56:00 ESTbob.poole@reason.org (Robert Poole)Evaluating the Proposal to Convert FAAs Air Traffic Control Organization Into a Nonprofithttp://www.reason.org/news/show/air-traffic-control-reform-testimon
<p class="p1">Chairman Shuster, Ranking Member DeFazio, and fellow Members: my name is Robert Poole, Director of Transportation Policy at Reason Foundation, a nonprofit think tank with offices in Los Angeles and Washington, DC. I received my engineering degrees from MIT and began my career in the aerospace industry, before moving into the think tank world.</p>
<p class="p2">I have been following the performance of the U.S. air traffic control (ATC) system since the late 1970s, and have written many reports and journal articles on the subject, including for the Transportation Research Board&rsquo;s peer-reviewed journal <span class="s1"><em>Transportation Research Record </em></span>as well as <span class="s1"><em>The Journal of Air Traffic Control</em></span>. Over the years I have visited corporatized air navigation service providers including Airways New Zealand, NATS, and Nav Canada, and have given presentations at conferences hosted by ATC organizations such as Air Traffic Control Association (ATCA) and the Civil Air Navigation Services Organization (CANSO). I am a member of the GAO&rsquo;s National Aviation Studies Advisory Panel, and during the last several years served on the ATC reform working groups of both the Business Roundtable and the Eno Center.</p>
<p class="p2">We are here today because there is a growing consensus that the U.S. air traffic control system is not performing as well as it should. While it remains the world&rsquo;s largest and one of the world&rsquo;s safest, it is &ldquo;no longer has the most modern equipment, the most efficient airplane routings, or the best technology of any of the world&rsquo;s air traffic control providers.&rdquo; Those are not my words: they are the conclusion of all three former Chief Operating Officers of the FAA&rsquo;s Air Traffic Organization, as well as three former Secretaries of Transportation.<em><span class="s2">1 </span></em>We have lost our global leadership position in air traffic control.</p>
<p class="p2">The question before Congress is: What is the best approach to reform the provision of air traffic control in the United States? Before I give you my answer, let me provide some context.</p>
<p class="p3"><strong>The Global ATC Corporatization Trend</strong></p>
<p class="p2">In 1987 the government of New Zealand shifted its ATC system out of the transport ministry and converted it into a government-owned corporation, paid directly by its aviation users. This was one of a series of government-wide reforms that included the corporatization of a number of government departments that provided direct services to various customers. The good performance of Airways New Zealand after it was corporatized inspired a wave of similar actions during the 1990s&mdash;including the creation of Airservices Australia, Nav Canada, and DFS (in Germany). Airways NZ was also the inspiration for Vice President Gore&rsquo;s reinventing government proposal for U.S. air traffic control, which resulted in legislation to separate our ATC system from the FAA as a government corporation dubbed USATS&mdash;U.S. Air Traffic Services. (Needless to say, that legislation was not enacted.)</p>
<p class="p5">In the decades that followed, more than 60 countries have corporatized their ATC systems, and some of those new air navigation services providers (ANSPs) created an international organization called CANSO&mdash;a counterpart of ACI for airports and IATA for airlines. Of the 87 full members of CANSO as of last year, 51 are commercialized, defined as being self-supporting from fees and charges paid directly to them by their customers and regulated at arm&rsquo;s length by the government&rsquo;s air safety regulator. In 2001 ICAO called for the organizational separation of air safety regulation from ATC service provision, to increase transparency and avert conflicts of interest between regulators and providers.</p>
<p class="p5">Reviewing the nearly three decades of ATC corporatization, three common features apply to those that are commercialized:</p>
<ol>
<li class="p5">Separation of safety regulation from ATC service provision;</li>
<li class="p5">Self-funding via customer charges, to ensure independence from government budgets; and,</li>
<li class="p5">Designed to operate as a customer-serving utility.</li>
</ol>
<p class="p5">There are three different organizational forms among those 51 self-supporting ANSPs:</p>
<ul>
<li class="p5">Government corporation (Airways NZ, Airservices Australia, DFS, etc.)</li>
<li class="p5">Private, for-profit corporation, with rate regulation (NATS)</li>
<li class="p5">Nonprofit user co-op (ARINC, RAMSA, Nav Canada)</li>
</ul>
<p class="p2">Those three alternatives are also found in various public utilities in the United States. In electricity, the for-profit/regulated model is most common, but we also have government utilities (e.g., the Los Angeles Dept. of Water &amp; Power) and many hundreds of electric and telephone user co-ops. These three alternatives offer three different ways to deal with the monopoly status of those utilities. In the case of for-profit companies, external rate regulation is the standard model. Government utilities are presumed (not always accurately) to be operating in the public interest and have no external rate regulation. User co-ops are self-regulated, since the governing board consists of rate-payers and sometimes other stakeholders.</p>
<p class="p2">The very first (rudimentary) U.S. air traffic control was provided for several years by an airline user co-op called Aeronautical Radio, Inc. (ARINC). It operated that service until the government&rsquo;s Commerce Department took it over in 1936. ARINC remained in business providing air-ground communications for airlines and developing new avionics. After World War II, it also helped start ATC user co-ops for Cuba (RACSA) and Mexico (RAMSA), both of which were later taken over by their governments. Nav Canada is the largest and most successful ANSP organized as a stakeholder co-op (although it does not use that term).</p>
<p class="p3"><strong>ATC Corporation</strong><span class="s4"><strong>s&rsquo; </strong></span><strong>Track Records</strong></p>
<p class="p2">There have been about a dozen independent studies of the performance of corporatized ANSPs, during the past decade. The Government Accountability Office carried out a review of five corporatized ANSPs in 2005, finding that after the change, safety either improved or remained the same; that costs were reduced and efficiency increased, and that investments were made in new technology.<em><span class="s2">2 </span></em>The MBS Ottawa study, with support from three universities, compared before/after performance of ANSPs on seven key performance measures, including safety.<em><span class="s2">3 </span></em>Across the board, performance was either the same or improved. Academic researchers Oster and Strong published the first book on ATC corporatizations in 2007, generally finding them to be successful and drawing lessons for reform of the U.S. ATC system.<em><span class="s2">4 </span></em>The same authors did a report on the potential for U.S. ATC corporatization for the IBM Center for the Business of Government.<em><span class="s2">5 </span></em>More recently, the Congressional Research Service provided a good overview of issues involved in ATC corporatization, drawing on the track record from other countries.<em><span class="s2">6 </span></em>The MITRE Corporation published an assessment of arm&rsquo;s-length safety regulation of ANSPs in six countries and found that it worked well and that in no case would either the ANSP or the safety regulator want to return to the prior situation.<em><span class="s2">7 </span></em>And a second book-length study, which also found positive results from corporatization, was published in 2015.<em><span class="s2">8</span></em></p>
<p class="p3"><strong>The U.S. Air Traffic Control Problem</strong></p>
<p class="p2">Broadly speaking, the problem facing the FAA&rsquo;s Air Traffic Organization is three-fold: inadequate and uncertain funding, a flawed governance model, and a status-quo-oriented organizational culture. These problems are inter-related, and in my study commissioned by the Hudson Institute, I concluded that the most serious underlying problem is the organizational culture.<span class="s2">9 </span>In that study, I compared the performance of the ATO and corporatized ANSPs in dealing with seven disruptive ATC innovations. In each case, the other ANSPs had acted far more like high-tech service businesses than our own ATO.</p>
<p class="p2">The question I then set out to answer was &ldquo;why.&rdquo; Reviewing the case studies and interviewing ATC experts within and outside of the ATO, I identified five reasons for the ATO&rsquo;s status-quo culture:</p>
<ol>
<li class="p2">Self-identity as a safety agency rather than as a business serving customers;</li>
<li class="p2">Insufficient technology expertise;</li>
<li class="p2">Inadequate management expertise;</li>
<li class="p2">Excessive (but well-meaning) oversight&mdash;the &ldquo;too many cooks&rdquo; problem; and,</li>
<li class="p2">Lack of customer focus (i.e., seeking to please Congress more than its aviation customers).</li>
</ol>
<p class="p2">All five factors were verified by an extensive set of peer reviewers convened by the Hudson Institute to review the draft of this report.</p>
<p class="p2">I concluded that the keys to fixing these problems were the following:</p>
<ul>
<li class="p2">Separate safety regulation from ATC service provision, to permit a technology-innovation culture to develop in the new ANSP, constrained of course by arm&rsquo;s-length safety regulation.</li>
<li class="p2">Change the funding system to that of airports and other public utilities, in which the customers pay the provider directly for using the infrastructure. This provides enough resources and the flexibility to recruit and retain top-notch technologists and program managers, as well as the ability to issue revenue bonds for large-scale modernization efforts, as airports and public utilities do.</li>
<li class="p2">Shift the governance model from numerous outside overseers to a core group of stakeholders&mdash;those who use the ATC system (aircraft operators and passengers) as well as those who make it run (management and controllers).</li>
</ul>
<p class="p2">These three features are best represented by the user co-op model of corporatization, of which our best example is Nav Canada.</p>
<p class="p3"><strong>Evaluating the Reform Proposals</strong></p>
<p class="p2">This committee is faced with two reform proposals. One proposal, from Chairman Shuster, is to convert the FAA&rsquo;s Air Traffic Organization into a federally chartered, nonprofit, self-funded ANSP with a stakeholder board. Ranking Member DeFazio&rsquo;s alternative would exempt the Trust Fund from sequestration and annual appropriations, as well as mandating further FAA procurement and personal reforms. While these reforms are well-intended, experience suggests they will not do the job.</p>
<p class="p2">The ATC Corporation proposal meets all three of the criteria outlined above, and is consistent with global ATC best practice as it has evolved over the last three decades. For reasons I have explained, it would address all three problems plaguing the Air Traffic Organization: funding, governance, and culture.</p>
<p class="p2">The DeFazio alternative, by contrast, would keep air traffic control and air safety regulation within the same organization. There are several problems with doing this:</p>
<ul>
<li class="p2">It is contrary to ICAO principles set forth in 2001 and now adhered to by nearly all developed countries;</li>
<li class="p2">It retains the current conflict of interest between regulation and service provision, which should be at arm&rsquo;s-length from one another; and,</li>
<li class="p2">It reinforces the identity of the ATO as part of a safety agency, rather than as a service delivery entity with external safety oversight, which leaves the status-quo organizational culture problem un-addressed.</li>
</ul>
<p class="p2">A second problem concerns the funding change. The ATC Corporation would be paid for directly by its customers, like other utilities. That would create a customer/provider nexus that refocuses the organization&rsquo;s attention on serving its aviation customers. By contrast, the DeFazio alternative would retain funding via excise taxes paid to the government and parceled out to the ATO from the Trust Fund. Since these funds would still be federal tax money, all the existing federal oversight would remain, since the funds would still be <em>taxpayers&rsquo; </em>money. The current set of ATC overseers includes OMB, GAO, the DOT Inspector General, the FAA Administrator, the DOT Secretary, and 535 Members of Congress. No one can manage a high-tech service business in the interest of its customers while having to report to that many overseers. Moreover, major investments in the ATC system would still have to be paid for out of annual cash flow, rather than using long- term financing via the bond market, as corporatized ANSPs (and U.S. airports) do.</p>
<p class="p2">Finally, I am dubious about further attempts at personnel and procurement reform, after reading two decades of GAO and Inspector General reports on the failure of previous efforts along these lines. We know that previous reforms of this kind have failed to address the underlying culture problem, while we have seen the transformation in country after country of former inwardly focused transport bureaucracies into customer-focused ATC service business. My engineering training tells me to go with what has been demonstrated to work, not with what has been demonstrated to fail.</p>
<p class="p3"><strong>Closing Comments</strong></p>
<p class="p2">There are several factors that make the United States unique among countries when it comes to air traffic control. It has by far the largest airspace jurisdiction and the highest level of flight activity, both commercial and non-commercial. It has a larger and more- diversified general aviation community than any other country, which is valuable not only for recreation but for providing transportation access to numerous rural areas and small towns not served by commercial airlines. The United States also has the world&rsquo;s largest aerospace and avionics industries, with potential that is likely not fully tapped on a global basis, because our ATC system has lagged behind others in modernization.</p>
<p class="p2">These factors all need to be taken into account in considering corporatization. In terms of scale, two points are not fully appreciated. First, the ATO&rsquo;s current system is already at the scale needed for our vast airspace and high levels of flight activity. Changing the funding and governance of the ATO is not creating a new ATC system from scratch; it is simply providing a better way to pay for and manage the system that already exists. Second, there are significant economies of scale in ATC, such that the airspace with the highest level of flight activity can spread fixed costs over a larger customer base, meaning lower unit costs. The current ATO&rsquo;s productivity level is above average, but that of Nav Canada is significantly higher, despite Nav Canada&rsquo;s smaller airspace and much lower overall flight activity. This suggests that better funding and management could and should lead to lower unit costs, thanks to increased productivity.&nbsp;Any transformation of the ATO must also take seriously the valuable roles played by business and commercial aviation. Imposing significantly higher costs on those users, or not including them as stakeholders in the governance model, would be very ill-advised.</p>
<p class="p2">The promise of NextGen has yet to be realized in terms of significant improvements in routings, time saving, fuel savings, better performance despite bad weather, etc. To be sure, the NextGen Advisory Committee has demonstrated that a diverse group of stakeholders can work together to set near-term priorities. But the context for NAC&rsquo;s activities has been the need to perform triage&mdash;to decide which few bits and pieces of NextGen can be implemented given recent years&rsquo; reductions in capital investment budgets, stop-and-start funding, mismatches in the timing of ATC system investments and aircraft equipage, etc. A self-funded ANSP focused on meeting its customers&rsquo; needs offers the best hope of faster implementation of all those elements of NextGen that truly have sound business cases.</p>
<p class="p2">My assessment is that the ATC Corporation proposal meets these tests. It provides for arm&rsquo;s-length safety regulation, making possible the development of an innovative corporate culture. It would free the ATO from the constraints of the federal budget, with a reliable and bondable revenue stream at a level that makes sense from both an operations and a capital modernization standpoint. It provides for a carefully balanced governing board of aviation stakeholders, enabling serious focus on serving its aviation customers. It provides strong protections for current and future employees. It would exempt&mdash;by statute&mdash;direct user fees for piston GA and non-commercial turbine aircraft. It provides an appeal process for fees that a user considers unwarranted. And it includes mandates for continued access to the national airspace system for rural areas and small communities.</p>
<p class="p2">What impresses me most of all is who has declared in favor of this reform&mdash;aviation professionals who know the system inside and out. That includes the controllers and it includes all three former Chief Operating Officers of the ATO. Each of them tried very hard to run the ATO like a business. And each concluded that this was simply not possible given the constraints of being trapped inside a large, tax-funded bureaucracy. I take their judgments very seriously, and I hope you will, too.</p>
<p class="p3"><em>Postscript:</em></p>
<p class="p2">The late Glen A. Gilbert is remembered as the &ldquo;father of air traffic control.&rdquo; He helped set up the first ARINC centers, as an American Airlines employee in the mid-1930s. When the government took over ATC, Gilbert became its first controller, and remained there for most of his career. In retirement in the late 1960s, Gilbert proposed that the ATC system be separated from the FAA and converted into a federally chartered nonprofit corporation similar to Comsat.<span class="s2">10 </span>So the idea of an ATC Corporation has a longer pedigree than many people realize.</p>
<p class="p7"><em><span class="s6">1 </span>Letter to Chairman Bill Shuster from former federal aviation officials, Feb. 1, 2016</em></p>
<p class="p7"><em><span class="s6">2 </span>Government Accountability Office, &ldquo;Characteristics and Performance of Selected International Air Navigation Service Providers and Lessons Learned from their Commercialization,&rdquo; GAO-05-769, July 29, 2005</em></p>
<p class="p7"><em><span class="s6">3 </span>MBS Ottawa, Inc., Air Traffic Control Commercialization: Has It Been Effective?, January 2006 (www.mbsottawa.com)</em></p>
<p class="p8"><em><span class="s6">4 </span><span class="s3">Clinton V. Oster and John S. Strong, </span>Managing the Skies: Public Policy, Organization, and Financing of Air Traffic Management<span class="s3">, Ashgate Publishing, 2007</span></em></p>
<p class="p7"><em><span class="s6">5 </span>Clinton V. Oster and John S. Strong, &ldquo;Reforming the Federal Aviation Administration: Lessons from Canada and the United Kingdom,&rdquo; IBM Center for the Business of Government, 2006</em></p>
<p class="p7"><em><span class="s6">6 </span>Bart Elias, &ldquo;Air Traffic Inc.: Considerations Regarding Corporatization of Air Traffic Control,&rdquo; Congressional Research Service, CRS 7-5700, R43844, January 5, 2015</em></p>
<p class="p7"><em><span class="s6">7 </span>Dan Brown, Tom Berry, Steve Welman, and E. J. Spear, &ldquo;CAA International Structures,&rdquo; MITRE Corporation, October 2014</em></p>
<p class="p8"><em><span class="s6">8 </span><span class="s3">Rui Neiva, </span>Institutional Reform of Air Navigation Service Providers: A Historical and Economic Perspective<span class="s3">, Edward Elgar Publishing, 2015</span></em></p>
<p class="p7"><em><span class="s6">9 </span>Robert W. Poole, Jr., &ldquo;Organization and Innovation in Air Traffic Control,&rdquo; Hudson Institute, January 2014 (<span class="s7">http://reason.org/files/air_traffic_control_organization_innovation.pdf</span>)</em></p>
<p class="p7"><em><span class="s4">&nbsp;</span><span class="s6">10 </span>Glen A. Gilbert, &ldquo;Gilbert Offers ATC Master Plan,&rdquo; <span class="s8">American Aviation</span>, Dec. 23, 1968.</em></p>
<p class="p1"><a href="https://www.youtube.com/watch?v=y-OC0cfW_Nc">Watch the Hearing</a></p>
<p class="p1"><a href="http://transportation.house.gov/calendar/eventsingle.aspx?EventID=399732">More From the Committee on Transportation and Infrastructure's Hearing</a></p>1014445@http://www.reason.orgWed, 10 Feb 2016 15:00:00 ESTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #130http://www.reason.org/news/show/air-traffic-control-newsletter-130
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">House bill calls for Nav Canada type nonprofit corporation</a></li>
<li><a href="#b">Inspector General on failed FAA reforms</a></li>
<li><a href="#c">Dissembling Delta</a></li>
<li><a href="#d">Should conservatives support ATC reform?</a></li>
<li><a href="#e">Controller misallocation documented by Inspector General</a></li>
<li><a href="#f">Ideological opposition to ATC corporation</a></li>
<li><a href="#g">News Notes</a></li>
<li><a href="#h">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>House Bill Calls for Nav Canada Type Nonprofit ATC Corporation</strong></p>
<p>After telegraphing their intent to do so for the past half year, House Transportation &amp; Infrastructure Committee Chair Bill Shuster (R, PA) and Aviation Subcommittee Chair Frank LoBiondo (R, NJ) have introduced their six-year FAA reauthorization bill, including a long section detailing the transformation of the current Air Traffic Organization into a self-supporting nonprofit ATC Corporation. Details of the corporation and the transition process constitute Title II of the Aviation Innovation, Reform, and Reauthorization Act (the AIRR Act), released February 3<sup>rd</sup>. A hearing to discuss the bill and the ATC Corporation is set for February 10<sup>th</sup>.</p>
<p>As promised, the ATC Corporation is a U.S. adaptation of the nonprofit, self-supporting, stakeholder-governed Nav Canada, which has transformed air traffic control north of the border and across the North Atlantic in its two decades of experience. It would be federally chartered (like the American Red Cross and the U.S. Olympic Committee), with all the normal powers and duties of a public utility. Like user-governed co-ops that provide electricity, telecommunications, and water supply in much of America, it would not need economic regulation because the rate-payers would have strong representation on the governing board. The FAA would become the arm's-length safety regulator, in accord with ICAO standards that went into effect more than a decade ago. Since it would not receive any federal tax money, it would be insulated from all the constraints of the government budget process. That would also enable it to issue revenue bonds for major capital improvements, just as airports have long been able to do.</p>
<p>While this would be a big change to a key portion of the U.S. aviation system, it is hardly the radical change that opponents are claiming by dubbing it "privatization." Groups like the National Business Aviation Association, Delta Airlines, and the gaggle of left-wing groups that have just formed Americans Against Air Traffic Privatization all use the P word to frighten people. "Privatization" implies either selling a government enterprise to a for-profit company (e.g., privatization of Conrail) or contracting out a government function to such a company (e.g., outsourcing of FAA Flight Service Stations). What the AIRR Act proposes instead for the FAA's Air Traffic Organization is <em>reform in place</em>. The same people would go home one day as government employees and come back to work the next day as ATC Corporation employees, with the same union contracts, the same pension benefits, and the same jobs. All that would be different are the funding system, the governance mechanism (stakeholder board), and some of the top management. That is not "privatization" in any meaningful sense of the term.</p>
<p>Speaking of the stakeholder board, here is how the bill proposes to create a workable balance. It calls for an 11-member board of directors, consisting of the CEO plus the following members appointed by designated aviation stakeholders:</p>
<ul type="disc">
<li>2 appointed by the Secretary of Transportation, presumably representing the traveling public;</li>
<li>4 appointed by the primary airline trade group;</li>
<li>2 appointed by the primary organization for general and business aviation;</li>
<li>1 appointed by the primary air traffic controllers' organization; and,</li>
<li>1 appointed by the largest airline pilots' organization.</li>
</ul>
<p>All board members would be required by law to owe a fiduciary duty to the best interests of the ATC Corporation, rather than to the group that appointed them.</p>
<p>NBAA and its allies have made a lot of noise claiming that the board would be dominated by "special interests," by which they seem to mean the airlines. But four out of 11 seats is hardly a recipe for domination (and don't expect the pilots' union appointee to be in lockstep with airline interests!) So that argument will now be far less credible.</p>
<p>The other hobby horse of the coalition of general and business aviation groups that has questioned corporatization has been the specter of unaffordable ATC user fees. AOPA and NBAA have raised tons of money over the years to protect their members from this menace. But the legs have been cut out from under them by Shuster and LoBiondo, since the bill explicitly exempts both piston GA and "non-commercial" turbine GA from paying any fees, even the very modest flat annual charge that piston GA pilots pay to Nav Canada. Without that to rail against, what substantive argument do the GA groups have left?</p>
<p>In terms of stakeholder influence I think the most important development occurred within an hour or so of the bill's unveiling on Feb. 3<sup>rd</sup>. Controllers' union NATCA released a statement by President Paul Rinaldi endorsing the plan set forth in the bill as good for the country and good for NATCA's membership. Rinaldi, Vice President Trish Gilbert, and other senior officials have been actively engaged in discussions of this subject for the past three years&mdash;with the Business Roundtable project, with the Eno Center project, and with Aviation Subcommittee staffers developing the bill. They have also visited Nav Canada, and done their own due diligence about how its transformation, and several others, have worked out for controllers and other employees. NATCA's carefully considered support should help make this subject worth serious consideration by Democrats in Congress&mdash;and by the Administration.</p>
<p>The introduction of a very good bill is a milestone&mdash;but it's still a long way from enactment. We can expect a spirited debate over the next several months. But an idea that was first proposed in the 1970s by Glen A. Gilbert, the "father of air traffic control," is closer to realization than ever before.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="b"></a>Inspector General Documents Failures of FAA Reform</strong></p>
<p>Opponents of ATC corporatization continue to pretend that the status quo is working pretty well, especially in implementing new technologies and procedures that are part of the NextGen modernization. That position increasingly lacks credibility, as anyone who has been reading audit reports from the Government Accountability Office and the DOT Office of Inspector General knows full well. The latest Inspector General report is pretty devastating. "FAA Reforms Have Not Achieved Expected Cost, Efficiency, and Modernization Outcomes," is Report Number AV-2016-015, issued January 15<sup>th</sup> and available on the Oig.dot.gov website.</p>
<p>The report reminds us that Congress has legislated two decades of reforms, aiming to make the current organization work better. These include personnel and procurement reform in 1995, a new accounting system to keep better track of costs, organizational reform 2000-2004 that created the Air Traffic Organization, and NextGen reorganizations in 2011 that included a Chief NextGen Officer and a Program Management Office. But despite all this, the report concludes that "Major projects continue to experience problems that delay the introduction of new technologies such as performance-based navigation, postpone benefits to users, and defer the retirement of costly legacy systems."</p>
<p>Here is a set of major headings in the report, each backed up by details and examples that I don't have space to include here.</p>
<ul type="disc">
<li>"FAA's reforms have not slowed cost growth or improved operational productivity."</li>
<li>"FAA has not effectively leveraged its reform flexibilities [or] adopted business practices."</li>
<li>"Management problems continue to impact FAA's efforts to deliver new technologies and capabilities."</li>
<li>"FAA reports improved performance, but it does not account for long-term cost and schedule performance results."</li>
<li>"Persistent management weaknesses underlie cost, schedule, and performance problems in delivering new technologies and expected benefits."</li>
</ul>
<p>And it concludes that, despite two decades of reform effort, FAA "continues to experience many of the same planning and management problems associated with implementing new programs and introducing new technologies, including projects critical to implementing NextGen."</p>
<p>One consequence of these institutional failings is rising costs and declining productivity. The report notes that between 1996 and 2012 the FAA's budget increased by 95%, and its Operations account (which is mostly ATC) by 108%. The workforce, including controller numbers, was roughly constant over this time period. But in terms of bang for the buck, that additional operating cost yielded not higher productivity but just the opposite. Annual operations per controller in terminal airspace decreased by 24.5% over this decade and a half, and operations per controller in en-route airspace decreased by 16.1%.</p>
<p>The study that I did for the Hudson Institute, "Organization and Innovation in Air Traffic Control," compared technology modernization by the FAA with similar efforts in countries with corporatized ATC providers. My thesis is that the organizational culture at FAA&mdash;not funding or micromanagement per se&mdash;is the root cause of FAA's shortcomings. You simply cannot run a high-tech, 24/7 service business from inside of a tax-funded, politically governed bureaucracy. That's what more than 50 other governments have recognized over the past 25 years. The United States is coming very late to this realization. (<a href="http://reason.org/files/air_traffic_control_organization_innovation.pdf">http://reason.org/files/air_traffic_control_organization_innovation.pdf</a>)</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="c"></a>Dissembling Delta</strong></p>
<p>Last month I countered arguments made by Delta Airlines officials who bizarrely claimed there is no evidence of technology gains or productivity increases in corporatized ATC systems such as Canada's. Alas, they have not given up their campaign. In just the past week they released a 10-page "study" whose title telegraphs the allegations made within: "The Costs of Privatizing [sic] Air Traffic Control and How It Will Impact Airline Travelers." Delta's indefatigable Steve Dickson penned an op-ed for <em>USA Today</em>, based on this piece of work, to which both Nav Canada and I responded, since it was so false to fact. Here are two gems from that report, both stated as fact in the op-ed.</p>
<p>First, by egregious misinterpretation of routinely published date, Dickson claimed that over its history Nav Canada's ATC fee levels have increased by 59%. In fact, from 1999 when those fees went into effect through 2014, the fee level has gone down by more than 30% compared with Canadian inflation. A similar Delta claim about NATS in the U.K. is also false. Second, Dickson cited a local aviation fuel tax increase by the provincial government of Ontario, a cost burden that corporatization of ATC did not prevent. Well, duh! State governments here are also allowed to impose fuel taxes on aviation, but that has nothing whatsoever to do with the cost of ATC.</p>
<p>There are similar howlers in the 10-page "study." For example, on p. 6 it appears to blame the phenomenon of Canadian passengers crossing the border to depart from U.S. airports like Bellingham, WA on high Canadian ATC costs. Wrong! The problem stems from higher <em>airport</em> costs, due to (a) the high lease payments Canadian airports must make to their federal government, and (b) the much higher PFC levels in Canada. Neither has anything to do with Nav Canada or ATC. And on p. 9 it cites the report of the U.K. Airport Commission about reduced air service between the North of England and London. But that report had nothing to do with the NATS; it was about the lack of <em>runway capacity</em> at Heathrow and Gatwick, which is entirely outside the control of NATS.</p>
<p>This sort of deliberate misrepresentation is a sign of desperation. If the facts don't support the case you desire to make, apparently Delta thinks it's OK to make up its own story. But those allegations must not be taken seriously.</p>
<p>The question many of us have been pondering in recent months is why Delta is carrying on this propaganda campaign, even to the point of resigning its membership in airline trade group A4A, which strongly favors ATC corporatization. In a long article about Delta CEO Richard Anderson in <em>Aviation Week</em>'s January 4<sup>th</sup> issue, Jens Flottau reported the following: "One observer notes that Delta is being difficult [on ATC reform] because NextGen would require it to invest in a lot of equipment for older jets, and because the restraints on slots in the New York area are actually good for it." He also noted that "Delta's bent for cheaper, older aircraft is something Anderson picked up at Northwest, which operated 40-year-old DC-9s with refurbished cabins."</p>
<p>There is definitely something to this. Today's Delta is the product of a merger between Northwest and Delta, which added older planes to the latter's fleet. According to CAPA's Fleet Database, the average age of Delta's fleet is 17.1 years. That compares with 11.5 years for American and 13.6 years at United. Delta's ancient fleet includes nine 747s averaging 24 years and 181 MD-80s and MD-90s averaging 23.1 years. A recently retired airliner pilot (who also once worked on ATC modernization at FAA) emailed me after last month's issue to support this aged-fleet hypothesis. Delta, he suggested, is "blocking ATC reform for many reasons, largely paralleling Northwest's earlier foolish positions over two decades ago (e.g., blocking FANS, GPS, data-link, and RNP). . . . It is likely they still think they can derive asymmetric political and operational advantage over their competitors by maintaining the current inefficient and expensive ATC system . . . . This is especially true if Delta continues to operate their present basket-case low-tech or geriatric used jets as the norm. For Delta, it doesn't matter how inefficient the ATC system is overall, as long as they can game the system better than their competitors."</p>
<p>There are genuine differences of opinion about corporatization of ATC, and the issue deserves a serious discussion of pros and cons, costs and benefits. But Delta's resort to making up its own "facts" is way out of bounds.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="d"></a>Should Conservatives Support ATC Reform?</strong></p>
<p>Rep. Mike Pompeo (R, KS) is a solid conservative, with a 100% voting record from the American Conservative Union and a grade of A from the National Taxpayers Union. Being from Wichita, Kansas&mdash;home of several large producers of general aviation aircraft&mdash;it's natural that he feels protective of the home-town industry. Alas, he seems to have gone off the deep end with a recent attack on ATC corporatization. After hosting a Town Hall Meeting with GA leaders last month, he is circulating a one-page brief titled "Why Air Traffic Control 'Privatization' Is Not Conservative." The piece makes six assertions, each explained by several bullet points.</p>
<p><span style="text-decoration: underline;">"More Bureaucracy"</span>. Somehow, the new ATC corporation is equated to "an additional layer of bureaucracy," as if the whole FAA would still be in place in addition to the transformed ATO. It would also supposedly "require DOT to expand its bureaucracy and hire more government workers to oversee the massive and risky transition process." There was no such expansion in Australia, Canada, Germany, or the U.K., and there is no reason for such expansion here, either.</p>
<p><span style="text-decoration: underline;">"Less Congressional Oversight"</span>. Pompeo laments reduced congressional efforts "to ensure accountability for program performance." Hello? How have 20 years of GAO and OIG reports enabled Congress to fix FAA's institutional problems with operating and modernizing ATC? Congressional micromanagement is part of the <em>problem</em>, not part of the solution.</p>
<p><span style="text-decoration: underline;">"More Expensive"</span>. Again with this "new bureaucracy to oversee ATC"&mdash;say what? Under the plan favored by most stakeholders, the existing ATO would be transformed into a self-funded nonprofit corporation, governed by an 11-member stakeholder board. There would be no "new bureaucracy." And no, there would not be "new tax increases and user fees" to pay for the ATC corporation. No tax money whatsoever would be needed or wanted, and per the House bill, there would be ATC user fees only on commercial turbine-powered flights&mdash;not GA.</p>
<p><span style="text-decoration: underline;">"Less Safe"</span>. The transformation from ATO to Air Traffic Corporation would supposedly "create distractions and regulatory ambiguities and operational complications that could pose serious safety risks." If more than 50 other ATC corporatizations had created such risks, they would certainly show up in the data&mdash;but no reduction in air safety has occurred. In its two decades of operation, Nav Canada rate of losses of separation between aircraft has been cut in half. Organizational separation of air safety regulation from ATC operations has been the global standard promulgated by ICAO since 2001, and the United States is one of the last countries to make this important transition, which would be accomplished by separating the ATO from the FAA.</p>
<p><span style="text-decoration: underline;">"Undemocratic"</span>. In a way, this is the crux of the issue. Will ATC continue to be politicized, with a de-facto board of directors of 535 members, or will it be run as a 24/7 high-tech service business, governed by a carefully balanced board of aviation stakeholders, including GA? Ensuring "aviation access to rural areas" can be spelled out in the enabling legislation, as it is in the House bill.</p>
<p><span style="text-decoration: underline;">"Canadian and European Models Aren't Comparable"</span> . Here Pompeo has been misled into writing that claims that European and Canadian corporatizations have been successful "are false and presumptuous." That is flatly incorrect. The success of ATC corporatization in those countries and elsewhere has been documented by GAO (2005), by a major international study (2006), in two full-length academic-quality books (2007, 2015), the IBM Center for the Business of Government (2006), MITRE Corporation (2014), and the Congressional Research Service (2015). He also claims that GA activity has declined in Canada, but Nav Canada data show that GA flight activity has increased more than 25% since 2000.</p>
<p>I'm glad to see that some other members of the General Aviation Caucus in Congress are taking a more sensible and better-informed position. Rep. Sam Graves (R, MO) is co-chair of the GA Caucus and a long-time private pilot. He and fellow member Todd Rokita (R, IN) wrote a much-publicized op-ed in <em>The Hill</em> last month pointing out the absence of GA user fees in the House bill and the need for fundamental institutional reform, of the kind embodied by the bill. Their piece received significant coverage in <em>Flying</em> and other GA publications.</p>
<p>I'm also pleased to report that the National Taxpayers Union, which gave Pompeo its top rating, has organized a letter by researchers at various conservative and free-market think tanks, supporting ATC corporatization as entirely consistent with conservative principles. I hope conservatives in Congress pay attention to its message.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="e"></a>Controller Misallocation Documented by Inspector General Audit</strong></p>
<p>News reports in December that discussed a forthcoming DOT Inspector General audit on controller staffing focused on a shortage of controllers. But now that the report is out, we can see that the real problem is <em>misallocation</em> of controllers at critically important facilities. While some of the most important towers and TRACONs have serious shortages, a number of en-route centers have surpluses.</p>
<p>The new report is "FAA Continues to Face Challenges in Ensuring Enough Fully Trained Controllers at Critical Facilities," AV-2016-014, dated Jan. 11, 2016. Overall, the audit found that total controller numbers are consistent with the agency's annual Controller Workforce Plan (CWP)&mdash;but the validity of the CWP is questionable. We know this because the National Academy of Science raised serious questions about it in a 2014 study. NAS said the mathematical model on which the CWP is based is flawed, especially for en-route facilities. And a previous Inspector General study, also in 2014, found flaws in the data FAA uses in that model. The audit also found large disagreements between facility managers and headquarters staff over what proper staffing levels should be.</p>
<p>The Inspector General team suggested a possible alternative model called Operational Planning and Scheduling (OPAS), a commercial product currently used by corporatized ANSPs in Australia, Canada, and Germany. Even though FAA's Office of Resource Optimization has done analyses using OPAS, the agency has rejected using it, preferring a different tool called BATS that it will start using for en-route center staffing plans this year.</p>
<p>How bad are current misallocations? The report presents data on fully certified controller (CPC) and trainee numbers at 23 critical facilities. Its assessment of over- or under-staffing are based on using just the CPC numbers, which I think is reasonable. On this basis, more than half the critical facilities appear to be under-staffed&mdash;including six of eight large TRACONS (such as Atlanta, Dallas, Denver, Houston, and New York). On the other hand, Atlanta Center, Chicago Center, and Washington Center were among those found to be over-staffed.</p>
<p>Another problem is that the CWP does not adequately take into account facility-specific retirement eligibility. A table in the report's Appendix lists all 23 critical facilities and the percentage of CPCs eligible to retire. Here are the worst problem cases, in declining percentage order:</p>
<table border="0" width="50%" cellspacing="0" cellpadding="0">
<tbody>
<tr>
<td valign="top">
<blockquote>
<p>O'Hare Tower</p>
</blockquote>
</td>
<td valign="top">
<p>50% eligible to retire</p>
</td>
</tr>
<tr>
<td valign="top">
<blockquote>
<p>Chicago TRACON</p>
</blockquote>
</td>
<td valign="top">
<p>45%</p>
</td>
</tr>
<tr>
<td valign="top">
<blockquote>
<p>Miami Tower</p>
</blockquote>
</td>
<td valign="top">
<p>44%</p>
</td>
</tr>
<tr>
<td valign="top">
<blockquote>
<p>Houston TRACON</p>
</blockquote>
</td>
<td valign="top">
<p>43%</p>
</td>
</tr>
<tr>
<td valign="top">
<blockquote>
<p>Chicago Center</p>
</blockquote>
</td>
<td valign="top">
<p>43%</p>
</td>
</tr>
<tr>
<td valign="top">
<blockquote>
<p>New York TRACON</p>
</blockquote>
</td>
<td valign="top">
<p>42%</p>
</td>
</tr>
<tr>
<td valign="top">
<blockquote>
<p>Indianapolis Center</p>
</blockquote>
</td>
<td valign="top">
<p>42%</p>
</td>
</tr>
</tbody>
</table>
<p>The audit also pointed out the large disparity in on-the-job training time. This typically varies from one to four years, for the same position in the same facility, but in some cases is even greater. The report notes one case at Chicago Center in which one trainee took 6.4 years to reach full certification while another, with a similar background, took less than one year. To me this suggests serious problems with candidate selection and training&mdash;which the recent change that uses a Biographical Assessment as a screening tool may well have exacerbated.</p>
<p>At least as interesting as the Inspector General report is a roundtable discussion on this subject held in December by the House Transportation &amp; Infrastructure Committee. Subject-matter experts were ATO Chief Operating Officer Teri Bristol, Assistant Inspector General for Aviation Matt Hampton, and NATCA President Paul Rinaldi. The latter made three recommendations for dealing with what he termed a staffing crisis: recruit continually (rather than once a year) for candidates with prior experience (military or FAA), streamline the training and certification process, and create better ways to move people to congested facilities. That sparked a lot of discussion, according to the account in <em>Eno Transportation Weekly</em> (Dec. 9, 2015). Bristol said the ATO has been working on the problem of transfers between facilities, but acknowledged that insufficient money makes this more difficult. Rinaldi said that the agency is allowed to offer better pay and more vacation days for people agreeing to such transfers, "<em>but since the 1990s those incentives have not been offered</em>."</p>
<p>There was also discussion of the switch to using a Biographical Assessment for initial screening of candidates. Rinaldi agreed that the initial B.A. "was poorly constructed and left too many people out, including many experienced [candidates]"&mdash;presumably meaning Collegiate Training Institution graduates. But he said the 2015 version was an improvement. There was also discussion of the mandatory retirement age of 56, with some suggesting that since the retirement age for commercial pilots had been increased from 60 to 65, perhaps an increase would also be warranted for controllers.</p>
<p>Needless to say, better workforce planning and management is yet another problem waiting to be solved, once the ATO is transformed into a real business.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="f"></a>Ideological Opposition to ATC Corporation</strong></p>
<p>Last month a coalition of left-wing groups formed Americans Against Air Traffic Privatization to lobby against any serious ATC reform. It announced that it has collected 130,000 signatures to its online petition against "privatization" that it will deliver to Congress. And it held a conference call January 26<sup>th</sup> featuring several of the groups' spokespersons and two Democratic members of the House Transportation &amp; Infrastructure Committee, Elijah Cummings from Maryland and Eleanor Holmes Norton from DC. AAATP member groups include Public Citizen, People Demanding Action, Daily Kos, Progressive Congress, and several lesser-known groups.</p>
<p>Aaron Karp of <em>Air Transport World</em> captured the irony of the conference call in his report the same day. While Andrea Miller of People Demanding Action denounced ATC "privatization" as a plot by the airlines to take over the system for their own benefit and bad-mouthed Nav Canada and NATS, that was not where Cummings and Norton were coming from. Norton, who is on the Aviation Subcommittee and asks good questions at its hearings, pointed out "great problems" with FAA's NextGen implementation and said it would be a mistake for Democrats to "look like we're standing for the status quo." And since this event was taking place before the bill had been released, Cummings cautioned that there was nothing yet to argue against, and that once Shuster put something concrete on the table, he'd be ready to discuss it. Norton added, "You will not find many Members saying 'Hey, we like it the way it is.' If we look like we're for the status quo, progressive Democrats on the committee are not being sufficiently innovative."</p>
<p>I was amused by Miller singling out the Reason Foundation, saying it "is driving a conservative, ideological plan through Congress." Actually, that's pretty ironic. In 15 years of writing this monthly newsletter, I have assembled empirical evidence both on the FAA's institutional limitations and on the growing success of corporatized ANSPs around the world. The groups comprising AAATP know little or nothing about aviation or air traffic control. But they have a knee-jerk negative reaction to anything that can be called "privatization," even when it's not. So who are the ideologues in this controversy?</p>
<p>People who know a lot about aviation and about air traffic control, like the following, have concluded from experience that it's simply not feasible for the FAA Air Traffic Organization to do what needs to be done, while it's entrenched within a federal bureaucracy. These people, along with former Senators Byron Dorgan and Trent Lott, sent a letter to Chairman Shuster February 1<sup>st</sup> urging that the ATO be separated from FAA and converted into a self-supporting, nonprofit ANSP analogous to Nav Canada:</p>
<ul type="disc">
<li>Former DOT Secretary Jim Burnley</li>
<li>Former DOT Secretary Norm Mineta</li>
<li>Former DOT Secretary Mary Peters</li>
<li>Former FAA Administrator Randy Babbitt</li>
<li>Former ATO Chief Operating Officer Russ Chew</li>
<li>Former ATO Chief Operating Officer Hank Krakowski</li>
<li>Former ATO Chief Operating Officer David Grizzle</li>
<li>Former Clinton National Economic Council Economist Dorothy Robyn.</li>
</ul>
<p>I'd rather take the advice of experts like these than a gaggle of progressive ideologues.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="g"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">Competitor in Space-Based ADS-B Surveillance</span>. A European firm developing a space-based aircraft tracking service announced in December that it also plans to enter the market for global space-based ADS-B surveillance. SES Techcom Services plans to "knit together a hybrid network of satellite constellations" to provide the service, which would compete with first-mover Aireon. Managing Director Gerhard Bethscheider told <em>Air Traffic Management</em> that they hope to have the first system in place for commercial use by 2022, which would be four years after Aireon's planned 2018 service is operational.</p>
<p><span style="text-decoration: underline;">SFO's Towering Anachronism?</span> The cover story of <em>Airport Business</em>'s year-end issue featured the huge new $70 million air traffic control tower that opened recently at San Francisco International Airport. The headline "SFO's Towering Achievement" struck me as ironic, since the case for building a 221-foot tower at an airport frequently fogged in (making its height irrelevant) has been seriously undercut by the development of remote tower technology. To be sure, this project was planned some years ago, before remote towers began being certified for operational use, but in a rational world this surely should be one of the last such edifices to be constructed using scarce ATC resources.</p>
<p><span style="text-decoration: underline;">Paperless Flight Information Region in Canada</span>. While electronic flight strips have long been standard in Nav Canada control towers, traditional paper flight strips were still in use in its en-route centers. The transition to fully paperless ATC, though, is now under way. <em>Nav Canada News</em> reported that the Extended Computer Display System (EXCDS), which the company markets worldwide, has become operational in the Montreal Area Control Center. Since all towers and Flight Service Stations in the Montreal Flight Information Region (FIR) were already paperless, that FIR is now the first in Canada to go all-electronic. The others will soon follow.</p>
<p><span style="text-decoration: underline;">Ryanair Challenges ANSPs Over Strikes</span>. Low-cost carrier Ryanair last month called on the European Commission and European Parliament to either ban strikes by air traffic controllers or allow other ANSPs to step in and maintain air traffic services during a strike. Ryanair's Jan. 25 plea was triggered by the 40<sup>th</sup> strike by French controllers since 2009. Ryanair has launched an online petition campaign in support of its proposal.</p>
<p><span style="text-decoration: underline;">Swiss ANSP Joins A6 Alliance in Europe</span>. Swiss ANSP Skyguide has signed an agreement with the A6 Alliance of large European ANSPs, enabling them to work together on projects undertaken as part of the Single European Sky effort. Skyguide will now be part of the A6 Working Group on Research &amp; Development, helping to achieve the goals of the SESAR 2020 ATC modernization effort.</p>
<p><span style="text-decoration: underline;">Central American ATC Upgrades Under Way</span>. Thanks to the Central American Corporation for Air Navigation (COCESNA), the ATC systems of Belize and Costa Rica are the first of the six member ANSPs to receive a major technology upgrade. In December a contract with Spain-based Indra Systems was announced, under which the ATC system, radar, and meteorological services will all be modernized. The contract will also involve training courses provided in Spain. COCESNA was founded in 1960 as a technical coordination body to help its members achieve integration and economies of scale in air navigation services in Central America.</p>
<p><span style="text-decoration: underline;">Airborne Holding Reduced Over London</span>. A joint effort among the ANSPs of the U.K., Ireland, France, and Eurocontrol has moved from the test phase into being fully operational. The aim is to reduce the amount of time aircraft approaching Heathrow from abroad must spend circling overhead while waiting for clearance to land. Under the new cross-border arrivals management (XMAN) system, aircraft heading toward Heathrow can be directed to adjust their speed up to 350 miles from the airport. Prior to this project, this could only be done once the planes reached U.K. airspace, typically 80 miles from Heathrow. Based on data from several years of trials, full implementation should save over $2.5 million per year in fuel costs and 8,000 tons of CO<sub>2</sub> emissions.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="h"></a>Quotable Quotes</strong></p>
<p>"There was a time when the United States was the gold standard in every aspect of air traffic control. Those days of global leadership, regrettably, are gone. The U.S. no longer has the most modern equipment, the most efficient airplane routings, or the best technology of any of the world's air traffic control providers. Further, the accumulated effects of budget unpredictability and a bureaucratic organizational structure have slowed progress on implementing next-generation technologies and inhibited our ability to properly staff facilities and procure the best equipment for our nation's air traffic controllers. . . . We need a reliable, robust 21<sup>st</sup> century system that ensures access for all users&mdash;preserving and expanding services for all communities, large and small. We urge Congress to take action to preserve the FAA's safety oversight of air traffic control while moving the operation and funding of air traffic control to a federally chartered, nonprofit organization that would be governed and funded by the stakeholders and users of our nation's aviation system. Only by taking this step will the United States be able to regain its global leadership and preserve the safety and efficiency that our citizens have enjoyed for so many years."<br /> &mdash;Letter to Chairman Bill Shuster from three former DOT Secretaries (Burnley, Mineta, and Peters), one former FAA Administrator (Babbitt), three former FAA Chief Operating Officers (Chew, Krakowski, and Grizzle), a former White House NEC staffer (Robyn), and former Sens. Byron Dorgan and Trent Lott, Feb. 1, 2016</p>
<p>"Canada, Germany, and New Zealand, among others, have shown how commercialized systems are able to depart from the old ways. From government agencies used to serving their political overlords, they became independent entities that serve the interests of their customers, the airspace users, first. They are now also able to be self-sufficient financially, not requiring any taxpayer subsidies&mdash;a must in fiscally constrained times. Commercialization has created leaner, more-focused organizations that are able to adapt more swiftly to rapidly changing operational and technological environments."<br /> &mdash;Rui Neiva, Eno Center for Transportation, "Conclusion and Policy Implications," <em>Institutional Reform of Air Navigation Service Providers: A Historical and Economic Perspective</em>, Edward Elgar Publishing, 2015, pp. 150-151</p>
<p>"There is only a limited chance for real improvement of the European [ATC] system unless we articulate this strong statement: Better performance should be rewarded by the possibility of expanding the scope of the business, so that underperformers face less business or even liquidation in the long term."<br /> &mdash;Jan Klas and Lubos Hlinovsky, ANS Czech Republic, "Where Now?" <em>Air Traffic Management</em>, Issue 4, 2015</p>
<p>"Once the price of fuel was not a concern for ANSPs. That was then, this is now: costs matter, even to ANSPs. The drop in fuel prices has severely rebalanced the pay-or-fly-around ratio. The cost-obsessed airlines are wearing out their calculators. This is playing itself out most notably in Europe, where the differences in en-route charges between neighboring ANSPs can be significant, and rerouting may not involve significant distances. You have to admit there is a certain irony here. Because they refused to change by creating truly integrated FABs, neighboring ANSPs are now doing exactly what they were trying to avoid doing: competing. . . . This new world of competition means that the survival of high-cost ANSPs is at risk if airlines can fly around their airspace economically. Meanwhile, the low-cost ANSPs have to deal with higher volumes and congestion, complicating their ability to meet delay targets."<br /> &mdash;Andrew Charlton, "Low-Cost ANSP Seeks Like-Minded Airline for Meaningful Relationship," <em>Aviation Intelligence Reporter</em>, December 2015/January 2016</p>
<p><a href="#top">&raquo; return to top</a></p>1014440@http://www.reason.orgFri, 05 Feb 2016 08:10:00 ESTbob.poole@reason.org (Robert Poole)Inspector General Report Shows FAA Is Failing and Why a Non-Profit Should Manage Air Traffic Controlhttp://www.reason.org/news/show/faa-failing-air-traffic-control-cor
<p>
Air traffic control reform is necessary to bring our nations
navigational systems into the modern era to enhance safety and
improve the flying experience for consumers. The Federal Aviation
Administrations Inspector Generals new&nbsp;<a href=
"https://www.oig.dot.gov/library-item/32908">report</a> makes it
clear that keeping things the way they are is not acceptable. It
is disappointing that some in the general aviation community
would defend the status quo and fight efforts to restructure the
FAA so that a federally chartered not-for-profit, independent
organization can focus on modernizing and streamlining air
traffic control operations.
</p>
<p>
<strong>The Facts About Air Traffic Control Reform</strong>
</p>
<p>
No one is proposing that the United States adopt a system like
that one in the United Kingdom; the proposal is more closely
modeled on Nav Canada, but it is important to note that a
proposal developed by the leadership of Congress Transportation
&amp; Infrastructure Committee will be specifically designed for
the U.S. airspace and stakeholders.
</p>
<p>
William Garvey, editor in chief of Business &amp; Commercial
Aviation, recently noted that&nbsp;when Canada transferred its
air traffic control operations to Nav Canada in 1996, that
transition was watched with keen interest [in the U.S.] with
dire predictions that airlines would take control, that fees
would price general and business aviation out of the system, and
that the executives would richly reward themselves. That,
however, is not what happened, according to Rudy Toering,
president and CEO of the Canadian Business Aviation Association.
In fact, he <a href=
"http://aviationweek.com/bca/nav-canada-and-faa-reauthorization">said
the system</a> has turned into a little bit of a jewel for
Canada.
</p>
<p>
Congressmen Sam Graves and Todd Rokita, leaders in general
aviation, recently wrote in <a href=
"http://thehill.com/blogs/congress-blog/economy-budget/266093-no-reason-to-stall">
<em>The Hill</em></a><em>:</em>
</p>
<blockquote>
<p>
It is true that our nations airspace is complex, and also
that our general aviation presence is the largest in the world.
But that does not preclude us from designing an Air Traffic
Control Organization that is superior to any system in
existence today. To say it cannot be done is to challenge the
very fiber of American ingenuity. We must adopt our own way
that meets the unique needs of our system and its users while
continuing to operate the safest air traffic control system in
the world.
</p>
</blockquote>
<p>
Heres what proponents of air traffic control reform are calling
for:&nbsp;
</p>
<ul style="list-style-type: square;">
<li>The creation of a federally chartered
<em>not-for-profit</em>, independent organization to oversee all
aspects of air traffic control. This organization will remain
under the oversight of the appropriate federal agency.
</li>
<li>Board members will be nominated by aviation stakeholders and
the federal government, including employee unions and air
passengers.
</li>
<li>The new organization will be self-funded by airlines through
a sliding scale of user fees based on their use of the system,
which will end the current federal ticket taxes that consumers
pay.
</li>
<li>The proposed restructuring changes the FAAs governance and
financing, which will alleviate the inordinate amount of
system-stress that impacts recruiting, training and retention of
air traffic controllers. Over the last five years, the FAA has
missed its hiring goals, and more than 3,000 controllers are
expected to retire in the coming years, putting a serious strain
on current employees.
</li>
</ul>
<p>
Here are just a few of the findings from the <a href=
"https://www.oig.dot.gov/library-item/32908">FAAs Inspector
General</a> that make significant reforms impossible so long as
the status quo remains:
</p>
<ul style="list-style-type: square;">
<li style="padding-left: 30px;">[T]he DOT IG found that FAAs air
traffic facility footprint has remained essentially unchanged at
317 air traffic facilities, and the agency has not taken
advantage of opportunities to reduce its facility costs. Notably,
since 2000, the agency has not converted any of its FAA-operated
towers to the Federal Contract Tower Program, despite its
recognition of potential cost savings (in 2012, the DOT IG found
that a contract tower costs on average about $1.5 million less to
operate than a comparable FAA tower).
</li>
</ul>
<ul style="list-style-type: square;">
<li style="padding-left: 30px;">FAAs /&nbsp;organizational
structure, which has been resistant to change, further deters its
reform efforts.<br />
The DOT IG also found that FAAs reforms have fallen short in
responding to legislation calling for improved delivery of new
technologies and capabilities.<br />
<br />
</li>
<li style="padding-left: 30px;">To help reduce cost and schedule
risks, FAA adopted a segmented approach to its major
acquisitions, including those under the FAAs NextGen initiative.
However, the DOT IG found that FAAs implementation of this
approach has led to unclear and inconsistent reporting on overall
program costs, schedules and benefits.<br />
<br />
</li>
<li style="padding-left: 30px;">For example, although FAA
reported that it completed the Automatic Dependent
Surveillance-Broadcast (ADS-B) ground infrastructure largely
on-budget and on-schedule, there are many unknowns that impact
the success of the program  services to pilots and controllers
are limited because FAA has yet to complete planned modernization
of systems that controllers rely on, problems related to the
display of ADS-B data on FAAs air traffic control automation
systems at four test sites remain unresolved, and the $6.6
billion costs of the current portion of the program are not
expected to outweigh the projected program benefits by $588
million.
</li>
<li style="padding-left: 30px;">Eight of the 15 major system
acquisitions that were going on as of September 30, 2013 had cost
increases and eight had schedule delays. Overall, ongoing major
system acquisitions experienced a cumulative cost increase of
$3.8 billion beyond FAAs original estimates, and delays ranging
from seven to 174 months, with an average delay of 51 months.
</li>
</ul>
<ul style="list-style-type: square;">
<li style="padding-left: 30px;">FAAs major acquisitions since
the creation of the ATO continue to experience performance
issues. Six programs experienced cost increases totaling $692
million and schedule delays averaging 25 months.<br />
--Notwithstanding reforms, the DOT IG found that several
underlying and systemic issues, including overambitious plans,
shifting requirements, software development problems,
ineffective contract and program management, and unreliable
cost and schedule estimates, impact FAAs ability to introduce
new technologies and capabilities that are critical to
transitioning to NextGen.
</li>
</ul>
<p>
A non-profit air traffic control entity would be well suited to
fix those flaws, and others, plaguing the ATC system because it
would free the system from political micromanagement, liberate it
from the federal budget process, and enable it to replace a
bureaucratic culture with a serve-the-customers business culture.
</p>
<p>
<em>Robert Poole&nbsp;is&nbsp;Searle Freedom Trust Transportation
Fellow and Director of Transportation Policy at the Reason
Foundation and a former senior advisor to four U.S. presidents
and the FAA.</em>
</p>1014429@http://www.reason.orgWed, 20 Jan 2016 20:00:00 ESTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #129http://www.reason.org/news/show/air-traffic-control-newsletter-129
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">Perspective on <span class="SpellE">Nav</span> Canada's first 20 years</a></li>
<li><a href="#b">Pro and con arguments on ATC corporatization</a></li>
<li><a href="#c">GAO on negative impact of FAA's uncertain funding</a></li>
<li><a href="#d">New CANSO report measures ANSP productivity</a></li>
<li><a href="#e">Highly automated and autonomous air vehicles</a></li>
<li><a href="#f">News Notes</a></li>
<li><a href="#g">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>Perspective on <span class="SpellE">Nav</span> Canada's First 20 Years</strong></p>
<p><span style="text-decoration: underline;">Editor's Note:</span> Since a bill is about to be introduced in the U.S. House to convert the FAA's Air Traffic Organization into a <span class="GramE">federally-chartered</span>, self-supporting, stakeholder-governed nonprofit corporation (inspired by the <span class="SpellE">Nav</span> Canada model), the following retrospective on <span class="SpellE">Nav</span> Canada's transition from a government agency may be of interest. John Crichton, founding CEO of <span class="SpellE">Nav</span> Canada, delivered this message to employees on the occasion of his retirement last month. The excerpts below are reprinted, with permission, from the December 2015 issue of <span class="SpellE"><em>Nav</em></span><em> Canada News</em>.</p>
<p>"On May 26, 1995, over 20 years ago, <span class="SpellE">Nav</span> Canada was incorporated as a private company.</p>
<p><span class="GramE">. .</span> . Prior to that, a consensus had been reached amongst the key stakeholders, including unions, that the service should be entrusted to a private, non-share capital corporation with stakeholder representation on the <span class="GramE">Board.</span> . . . The negotiations, as we all know, were successful, and <span class="SpellE">Nav</span> Canada assumed ownership, operation, and control of the Canadian air navigation system (ANS) at midnight on October 31, 1996.</p>
<p>"The [transition] involved moving over 6,000 people out of a government department into a private company overnight. The vast majority of these people had never worked in the private sector, and all of them had been subject to a wage freeze of five-plus years, creating a major labor relations challenge. All collective [bargaining] agreements had to be renegotiated in two years.</p>
<p>"What about safety? Could a private company be trusted to run such a safety-sensitive system? <span class="GramE">. .</span> . Could we reduce costs to our customers while improving service levels? There were major technology issues. Most of the air traffic management (ATM) systems and communications navigation, and surveillance (CNS) systems were old and in need of replacement. The CAATS project [counterpart to FAA's ERAM] was in serious trouble from the points of view of costs, schedule, and functionality . . . the only things that mattered for this kind of undertaking!</p>
<p>"The company also inherited a significant staffing shortage within the air traffic controller ranks, and it needed to rapidly stand up all new corporate services such as finance, human resources, information management, commercial relations, and the new office of safety and <span class="GramE">quality.</span> . . .</p>
<p>"As we reflect today on all of those challenges, we should be extremely proud of what we have accomplished. The safety red herring has been laid to rest. The five-year rate of losses of separation between IFR aircraft is half of that while in government. Successful modernization programs have given <span class="SpellE">Nav</span> Canada people better and safer tools to work with. <span class="GramE">Safety oversight has been enhanced by separating the regulator and the operator</span>. <span class="SpellE">Nav</span> Canada was the first ANS to introduce non-punitive reporting (or "just culture" as it is called today). I am convinced that safety is everybody's job every day at <span class="SpellE">Nav</span> Canada, and our results show it. International safety benchmarking studies show us leading the world.</p>
<p>"All our major ATM and CNS systems have been replaced or are about to be. CAATS was turned around and is now a world-leading flight data processing system. Numerous physical facilities have been replaced. Technology development was brought in-house, resulting in better products, faster, and at lower costs. <span class="SpellE">Nav</span> Canada and our people are world leaders in ATM science. We export our products around the world.</p>
<p>"Our labor relations climate is constructive and productive. There is mutual respect on both sides and a genuine attempt made by all parties to find solutions. Our employee population is smaller, but I believe more engaged and doing more meaningful work. Statistics Canada data from 2012 indicates that a large majority of <span class="SpellE">Nav</span> Canada employees are in the top 10% of wage earners in Canada.</p>
<p>"We have maintained AA credit ratings throughout our entire history. Our corporate bonds trade at the lowest spreads to government bonds of any private corporation. When we issue new debt the demand for it routinely exceeds supply by two or three times.</p>
<p>"Service levels to our customers have dramatically improved, and it is unusual to have significant delays in the system attributable to <span class="SpellE">Nav</span> Canada. The charges our customers pay to us are now about 35% less than the rate of inflation over the last 19 years. We have not had a rate increase in 11 years. Our debt profile is declining. We finance our capital spending out of cash flow. Capital spending at <span class="SpellE">Nav</span> Canada is half of that spent when in government, and we get three times the product twice as fast. Our own people build the systems in integrated teams&mdash;a world first in our business.</p>
<p>"How did we accomplish all this? We did it by working together and never losing faith in the belief that there was a better way. We did it by respecting each other and recognizing each of our unique talents and <span class="GramE">contributions.</span> . . .</p>
<p>"I am now retiring as your President and CEO, and to say that I am proud of what all of you have accomplished would be an understatement of monumental proportions. You have made <span class="SpellE">Nav</span> Canada the most respected ANS in the world, and others are beginning to emulate us, the sincerest form of flattery."</p>
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<p><strong><a name="b"></a>Pro and Con Arguments Over ATC Corporatization Continue</strong></p>
<p>The rhetoric over converting the Air Traffic Organization into a nonprofit air navigation service provider (ANSP) continues to heat up, as the date nears for introduction of the House bill. Airlines for America and the Business Roundtable have been holding events and placing op-ed pieces in key media around the country, making the case for doing such a transition. Joining them recently has been former Sen. Byron Dorgan (D, ND), who in 2014-15 co-chaired the <span class="SpellE">Eno</span> Transportation Center working group on ATC reform. Dorgan had an op-ed in <em>The Hill</em> on December 16<sup>th</sup> making five positive points, including that the current ATC funding and governance model is broken, that independence of the ATO would strengthen the new ATC system, and that this would not be "privatization," a position I, too, have long maintained.</p>
<p>Former ATO Chief Operating Officer David Grizzle has likewise taken to the op-ed pages to make the case for corporatization&mdash;a position he shares with the other two former COOs, Russ Chew and Hank Krakowski. All three have been in the position of trying to run the ATO like a business, and all three concluded from their experience that it simply can't be done under the institutional constraints that the ATO is forced to operate under.</p>
<p>Op-eds by four airline executives in <em>Crain's New York Business</em> and by Grizzle in the <em>Miami Herald</em> both led to letters to the editor by Steve Brown, Chief Operating Officer of opponent NBAA (representing mostly business jets and turboprops). Both letters attempted to smear the U.K.'s NATS as an example of the bad things that can happen as a result of corporatization. First, Brown noted that a few months after its start-up, NATS lost money and eventually got a government bailout. What he left out was that the sudden large decrease in air traffic and revenue was due to the collapse of air travel (especially on the North Atlantic) in the aftermath of the 9-11 terror attacks, affecting all ANSPs in that market, including the FAA's ATO. Many governments, including ours, stepped in to aid private companies in the aftermath of 9-11.</p>
<p>Even more egregious was the following, which appeared in both of Brown's letters:</p>
<blockquote>
<p>"Consider a report this year [2015] by the UK's own Airports Commission, which states that the system is 'showing unambiguous signs of strain,' producing 'more delays, higher fares, and reduced connectivity' at London's airports. Of course, the impact of the situation isn't limited to London. 'Another important consequence,' the Commission goes on to observe, 'is the decline of domestic services from other areas of the UK, particularly the North of England and Scotland, into the largest London airports, impacting the growth of their economies.'"</p>
</blockquote>
<p>Sounds pretty damning, but since I have that report on my shelf, I re-read its executive summary and found that the quotes Brown cited were about the shortage of <strong>airport capacity</strong> in Southeast England. They have nothing to do with any lack of capacity or service by NATS, which Brown implied by writing this as part of his "snapshot of the UK's privatized ATC system." If NBAA has to make things up, it must realize that its case against reform is pretty thin.</p>
<p>Then there is the odd man out among airlines, Delta. The captive audience of the airline's passengers are this month treated to CEO Richard Anderson's defense of the status quo, "The System Is Working," in the January issue of <em>Delta Sky</em> magazine. In addition to the usual Delta claim that corporatization would disrupt implementation of <span class="SpellE">NextGen</span>, Anderson also makes the bizarre statement that "Last year I traveled to [<span class="SpellE">Nav</span> Canada's] headquarters to see if that kind of system would benefit the United States, and I didn't see anything to convince me that privatization [sic] would reduce costs for travelers. I came back with zero data showing operational efficiency or improvements as a result of privatization." Well, I made that same trip in December 2014, and came back with detailed facts and figures on the enormous improvements that corporatized <span class="SpellE">Nav</span> Canada has made in its two decades of existence. (See also the lead article in this newsletter, by outgoing CEO John Crichton.)</p>
<p>What I find heartening in recent weeks is signs of change in the general aviation community. A case in point is an editorial in the December issue of <em>Business &amp; Commercial Aviation</em>, by Editor-in-Chief William Garvey ("Northern Exposure: Worth a Closer Look"). He devotes much of the piece to the history of <span class="SpellE">Nav</span> Canada, and the improvements it has made to ATC in Canada. He also cites Rudy <span class="SpellE">Toering</span>, the CEO of the Canadian Business Aviation Association (CBAA), the counterpart of our own NBAA. <span class="SpellE">Toering</span> tells Garvey that <span class="SpellE">Nav</span> Canada "has turned into a little bit of a jewel for Canada," that its ATC fees are among the lowest in the world, and that "we haven't had a rate increase in nine or ten years." Garvey concludes that, "As the debate heats up on ATC reauthorization, the actual Canadian experience regarding business and general aviation should be part of the deliberation."</p>
<p>Another encouraging straw in the wind is an op-ed that appeared January 18<sup>th</sup> in <em>The Hill</em>: "No Reason to Stall." The authors are Rep. Sam Graves (R, MO) and Todd <span class="SpellE">Rokita</span> (R, IN), both of whom are members of the House General Aviation Caucus. They are very clear that "the status quo is not working, and with each blunder by the FAA it becomes more apparent that the agency is simply not capable of implementing <span class="SpellE">NextGen</span> on its own. It's time for a better approach." While underlining their opposition to per-transaction user fees for general aviation, they report being positively engaged "in discussions on transitioning air traffic control responsibilities from an ineffective federal bureaucracy to a user-funded, user-governed, not-for-profit organization, all in a manner that protects the small aircraft operators and private pilots who use the system."</p>
<p>That's what <span class="SpellE">Nav</span> Canada has done. And I see no reason why we can't do likewise here.</p>
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<p><strong><a name="c"></a>GAO Documents Negative Impacts of Funding Uncertainty</strong></p>
<p>Uncertainty in federal funding has caused serious problems for FAA, and especially for modernization of the ATC system. That's the finding of a new report from the Government Accountability Office, released on December 8<sup>th</sup>. "Aviation Finance: Observations on the Effects of Budget Uncertainty on FAA" (GAO-16-198R) was requested by the House Aviation Subcommittee. They asked GAO to document and quantify, where possible, how uncertain funding has affected FAA operations and the <span class="SpellE">NextGen</span> modernization program. Those uncertainties include an authorization lapse in 2011 that resulted in $400 million less aviation excise tax revenue than expected, the 23 extensions (of from one week to six months) prior to the 2012 reauthorization, and the March 2013 sequestration, which led to furloughs of controllers, closure of the controller training Academy for nearly a year, and the threat to shut down 149 contract towers.</p>
<p>The shut-down of the Academy resulted in only 554 new controller hires in 2013, compared with a planned 1,315, which has led to today's shortfall of 820 controllers that is plaguing busy ATC facilities. The impact on <span class="SpellE">NextGen</span> has been profound, including a delay in even making the decision to invest in <span class="SpellE">DataComm</span> for en-route airspace (where it offers the greatest benefits), with only a modest number of control towers getting this upgrade over the next several years. Likewise, various tools needed for Performance-Based Navigation (PBN) have been delayed or put on incremental implementation schedules, meaning full PBN benefits are still years away. Also delayed to some uncertain time in the future are two planned improvements to aviation weather data&mdash;Common Support System-Weather (CSS-<span class="SpellE">Wx</span>) and <span class="SpellE">NextGen</span> Weather Processer (NWP). All these delays and uncertainties not only push projected benefits a lot farther into the future; they also decrease aviation user support for <span class="SpellE">NextGen</span>.</p>
<p>In response to the Subcommittee's question about alternative funding and budget options, GAO suggested direct ATC charges rather than appropriated tax money, bonding a user-charge revenue stream the way airports routinely do, and restructuring the Air Traffic Organization to be more like its many ANSP counterparts in other countries that are self-supporting from ATC fees and charges.</p>
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<p><strong><a name="d"></a>New CANSO Report Measures ANSP Productivity</strong></p>
<p>Air traffic control is a high-tech service business paid for either directly or indirectly by its aviation customers. It is therefore quite reasonable for those customers to be concerned about the value proposition they are being offered: how much bang for their bucks are they getting? In Europe, the Performance Review Commission of <span class="SpellE">Eurocontrol</span> produces an annual performance report, but it includes only European ANSPs. But for the past six years, the ANSP trade association CANSO has been producing an increasingly sophisticated report, covering as many CANSO members (worldwide) as are willing to provide data.</p>
<p>The CANSO <em>Global Air Navigation Services Performance Report 2015</em> was released in December, in three volumes: an executive summary, an industry report, and a report comparing the participating ANSPs. The latter is generally of the most interest to ANSP customers and to researchers and policymakers. In 2015 CANSO obtained data from 34 ANSPs&mdash;from the Americas (5), Africa (2), Asia-Pacific (6), Europe (18), and the Middle East (2). Conspicuously absent were two of the most important European ANSPs&mdash;DFS (Germany) and NATS (U.K.). The executive summary notes that the majority of participating ANSPs reduced their cost per IFR flight hour in the latest reporting year (2014).</p>
<p>In the volume that compares and contrasts ANSPs, stark differences among the providers are once again evident (and only 28 of the 34 overall participants allowed their data to be compared with others). At least three factors make these direct comparisons difficult. First, there are significant economies of scale in air traffic control, so other things equal, larger ANSPs should have lower unit costs. But other things are not equal, especially when comparing compensation costs between developed and developing countries. In most cases, developed countries will have significantly higher compensation costs than developing countries. A third key factor is the fraction of oceanic ATC operations compared with domestic. It takes more ATC resources to manage domestic flights, for which terminal costs are a larger fraction of the total than for long over-water flights.</p>
<p>For this article, I will compare only ANSPs of highly developed countries, and will report separately for domestic and oceanic airspace. Two key productivity measures are cost/IFR flight hour and IFR flight hours per controller operating hour. For the five advanced developed countries in the report, here are the domestic figures.</p>
<table border="1" width="100%" cellspacing="0" cellpadding="2">
<tbody>
<tr>
<td valign="top">
<p><strong>ANSP</strong></p>
</td>
<td valign="top">
<p><strong>Country</strong></p>
</td>
<td valign="top">
<p><strong>Cost/IFR flight hour ($)</strong></p>
</td>
<td valign="top">
<p><strong>IFR flight hours/controller hour</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p>&nbsp;FAA ATO</p>
</td>
<td valign="top">
<p>USA</p>
</td>
<td valign="top">
<p>$465</p>
</td>
<td valign="top">
<p>0.97</p>
</td>
</tr>
<tr>
<td valign="top">
<p><span class="SpellE">Nav</span> Canada</p>
</td>
<td valign="top">
<p>Canada</p>
</td>
<td valign="top">
<p>$320</p>
</td>
<td valign="top">
<p>1.14</p>
</td>
</tr>
<tr>
<td valign="top">
<p>JANS</p>
</td>
<td valign="top">
<p>Japan</p>
</td>
<td valign="top">
<p>$604</p>
</td>
<td valign="top">
<p>0.81</p>
</td>
</tr>
<tr>
<td valign="top">
<p>LFV</p>
</td>
<td valign="top">
<p>Sweden</p>
</td>
<td valign="top">
<p>$618</p>
</td>
<td valign="top">
<p>0.55</p>
</td>
</tr>
<tr>
<td valign="top">
<p>Airways NZ</p>
</td>
<td valign="top">
<p>New Zealand</p>
</td>
<td valign="top">
<p>$463</p>
</td>
<td valign="top">
<p>0.52</p>
</td>
</tr>
</tbody>
</table>
<p>The average cost/IFR flight hour for all the ANSPs in the report is $498. On this measure, Japan has lots of traffic, but their ATO fails to realize its full potential economies of scale. Sweden's high unit cost may be due to its much smaller size. On the flight hours/controller hour, lower traffic levels hurt the standing of Sweden and New Zealand. Here again, <span class="SpellE">Nav</span> Canada is the productivity champ.</p>
<p>For oceanic airspace, only three of the advanced developed countries have significant oceanic traffic. Their oceanic numbers are the following:</p>
<table border="1" width="100%" cellspacing="0" cellpadding="2">
<tbody>
<tr>
<td valign="top">
<p><strong>ANSP</strong></p>
</td>
<td valign="top">
<p><strong>Country</strong></p>
</td>
<td valign="top">
<p><strong>Cost/IFR flight hour ($)</strong></p>
</td>
<td valign="top">
<p><strong>IFR flight hours/controller hour</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p>FAA ATO</p>
</td>
<td valign="top">
<p>USA</p>
</td>
<td valign="top">
<p>$100</p>
</td>
<td valign="top">
<p>5.5</p>
</td>
</tr>
<tr>
<td valign="top">
<p><span class="SpellE">Nav</span> Canada</p>
</td>
<td valign="top">
<p>Canada</p>
</td>
<td valign="top">
<p>$&nbsp; 71</p>
</td>
<td valign="top">
<p>6.2</p>
</td>
</tr>
<tr>
<td valign="top">
<p>Airways NZ</p>
</td>
<td valign="top">
<p>New Zealand</p>
</td>
<td valign="top">
<p>$&nbsp; 68</p>
</td>
<td valign="top">
<p>3.4</p>
</td>
</tr>
</tbody>
</table>
<p>The average oceanic cost/IFR flight hour was $113, and the average flight hours per controller hour was 3.7. In this case also, <span class="SpellE">Nav</span> Canada takes the honors with a combination of second-lowest cost per flight hour and the highest number of flight hours per controller.</p>
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<p><strong><a name="e"></a>Highly Automated and Autonomous Systems Are Coming</strong></p>
<p><em>Guest column by Gary Church</em></p>
<p>The future I outline here will begin within the next 15 to 20 years. Large transport aircraft will begin to migrate from the systems in use today, proactively manipulated by onboard flight crews (pilots in-the-loop), <span class="GramE">to automated systems that are monitored by pilots in the aircraft</span> (pilots on-the-loop). A later step will involve monitoring from the ground, to intercede in the aircraft's operation if necessary. <span class="GramE">While these are revolutionary concepts, the migration will be evolutionary&mdash;one step at a time over a number of years.</span></p>
<p>A goal being worked on today is an optionally piloted aircraft for the 2030-time frame. This will be a transport category aircraft operated over long distances with a single flight crew in lieu of the multiple flight crews needed today. The flight crew of pilot and co-pilot will take off and land the aircraft conventionally, but for long stretches of en-route flight the aircraft will be monitored by highly automated systems onboard the aircraft and/or systems and pilots from the ground. Currently a major cargo carrier has established a team of 50 engineers to begin planning for as many as 120 optionally piloted transport aircraft for long-range international operations in the 2030 time period. This parallels an Air Force effort to build between 179 and 358 optionally piloted KC-46 tankers during this same 2030 period.</p>
<p>In both cargo and military planning, an early stage concept has a reduced flight crew monitoring the highly automated aircraft onboard, with concurrent monitoring by a second crewmember on the ground. The next big step anticipated well into the future for aircraft not carrying humans may be the movement of flight crew to a ground monitoring position for one or more aircraft, interceding only when necessary. Those currently working on this envision that the level of automation and its sophistication and reliability will only require intervention in rare contingency situations.</p>
<p>Autonomy as it develops for some military and civil applications can go well beyond this once the aircraft is able to act independently of preprogrammed functionality. At that stage, the automation can restructure (in real-time) the means and methods of conducting its mission within some bounds but potentially without human intervention. This means the system has what some would call artificial intelligence.</p>
<p>In June 2015 the Office of the Chief Scientist of the Air Force published a document called <em>Autonomous Horizons&mdash;</em>an excellent primer on practical considerations for future autonomous operations, and well worth a 30-page read. One of the basic premises is that the roles of the human and the autonomous vehicle must be closely linked to optimize the roles of each and their respective strengths and weaknesses.</p>
<p>There is apprehension in some quarters that the loss of direct human control in cars, boats and planes will create intolerable risks. Nevertheless, the actual trend is that a majority of accidents are caused not by technological failures but by human failures of judgment or performance or misunderstanding of the aircraft systems. The highly reported losses of Air France 447 in 2009 and Air Asia 8501 in 2014 were both attributable to human error in response to aircraft system alerts. According to a 2010 report from the Aircraft Owners and Pilots Association, pilot errors from distraction or poor judgment consistently account for about 75% of general aviation accidents.</p>
<p>Hundreds of millions of dollars are being spent annually to continue to develop more-highly automated vehicles &ndash; land, sea and air. The current focus is to begin to develop automated responses to unusual events. These efforts move the human further out of the command and control loop and into monitoring high-level functions. This has resulted in a very positive safety trend, but doing so has also created a new challenge, since humans are not effective monitors, being easily bored or distracted. Further, research on self-driving cars suggests that once a human is out of the loop, the time to reengage and be in a position to take control can take as much as 20 seconds or more. For a vehicle travelling at 60 miles per hour this one-third of a mile. At commercial air transport speeds, it's about 2.5 miles.</p>
<p>This means that highly automated and autonomous systems will eventually replace the human as the weakest link in the automation chain, whether we humans feel comfortable with that or not. Trends will demand ever-increasing safety, efficiency, and performance. This also means finding new roles, responsibilities and duties for the human interacting with highly automated and autonomous systems. Humans will likely take on a managerial role to define mission goals or objectives but without providing detailed instructions, means, or methods&mdash;which will be an integral part of the highly complex system software and hardware.</p>
<p>It is a brave new world of highly automated and autonomous aircraft. Since this new future appears inevitable, let's hope that organizations and personnel with a "dog in this hunt" can get well in front of this challenge to help usher in well developed and timely improvements in aviation safety, performance and efficiency.</p>
<p><em>Gary Church has consulted with both military and civil manufacturers and operational organizations on unmanned aircraft systems. This commentary reflects <span class="GramE">his own</span> views.</em></p>
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<p><strong><a name="f"></a>News Notes</strong></p>
<p><span class="SpellE"><span style="text-decoration: underline;">Nav</span></span><span style="text-decoration: underline;"> Canada Gets a New CEO</span>. December brought news that <span class="SpellE">Nav</span> Canada's founding CEO, John Crichton, would retire at the end of 2015, to become chairman of the board of <span class="SpellE">Aireon</span>, the space-based ADS-B <span class="GramE">company</span> partly owned by <span class="SpellE">Nav</span> Canada. Replacing Crichton will be Neil Wilson, who has been vice president and general counsel at <span class="SpellE">Nav</span> Canada since 2002.</p>
<p><span class="GramE"><span style="text-decoration: underline;">South Africa's ATNS Signs Up for Space-Based ADS-B</span>.</span> Last month space-based ADS-B <span class="GramE">company</span> <span class="SpellE">Aireon</span> announced its second contract for services with an ANSP (other than its founding ANSP members). Air Traffic and Navigation Services (ATNS), South Africa's corporatized ANSP, will obtain 100% ADS-B services for its two flight information regions, Cape Town FIR and Johannesburg FIR. Those two FIRs constitute 10% of the world's airspace.</p>
<p><span style="text-decoration: underline;">FAA Sued for Reverse Discrimination</span>. On December 30<sup>th</sup> Mountain States Legal Foundation filed a lawsuit alleging reverse discrimination in the FAA's revised controller selection process, which implemented a controversial biographical questionnaire (BQ) as its initial screening device. The suit alleges violations of the Civil Rights Act of 1964 and the due process clause of the Fifth Amendment. The lead plaintiff is Andrew <span class="SpellE">Brigida</span>, holder of two aviation degrees and a 100% score on the previous controller aptitude test. The class-action lawsuit seeks to represent all those screened out by the BQ.</p>
<p><span style="text-decoration: underline;">FAA Launches First Phase of VOR Decommissioning</span>. In late November the FAA announced the start of the first phase of its plan to decommission several hundred VORs, the 1940s-vintage ground-based navigation aids. The original <span class="SpellE">NextGen</span> concept called for eliminating nearly all the thousand-odd VORs, but the lack of a <span class="GramE">back-up</span> to the GPS network (on which <span class="SpellE">NextGen</span> relies) led to the plan to retain a "minimal operational network" (MON). Decommissioning was originally planned for about 500 VORs, but due to concerns from general aviation groups, the number to be retired in phase 1 is just 74, with phase 2 (beginning in 2020) to retire another 234. That will leave the MON at 649 VORs, saving far less in ongoing operating and maintenance costs than originally envisioned.</p>
<p><span style="text-decoration: underline;">Reduced Lateral Separation for North Atlantic Tracks</span>. NATS and <span class="SpellE">Nav</span> Canada last month announced the start of Reduced Lateral Separation (RLAT) on the North Atlantic flight track system that they operate cooperatively. Due to the absence of radar surveillance over most of the North Atlantic (the world's busiest oceanic airspace), lateral separation has long been one degree of latitude&mdash;60 nautical miles (nm). But thanks to the accuracy provided by ADS-B, and faster and more reliable communications due to controller-pilot data link communications (CPDLC), air safety regulators have approved a reduction to one-half a degree (30 nm). The first step will add one additional flight track each way, but by November the number of tracks will be doubled, as 30 nm becomes standard. NATS and <span class="SpellE">Nav</span> Canada estimate that this change will reduce CO<sub>2</sub> emissions on the North Atlantic by 52,000 <span class="SpellE">tonnes</span> per year, thanks to reduced fuel burn due to more flights at optimal altitudes. This will also mean faster trips for passengers.</p>
<p><span style="text-decoration: underline;">General Fund Support for FAA Still Low</span>. In debates over corporatization of the FAA's Air Traffic Organization, opponents often claim that U.S. ATC service is subsidized due to the "general fund contribution" representing about one-third of the FAA's budget. Some years have seen percentages that high, but since 2001 that percentage has fluctuated from a low of 7.2% (FY 2015) to a high of 33% (FY 2010), averaging just <span class="GramE">under</span> 20%. The Omnibus FY 2016 budget recently enacted ended up at 10.7%, above the FAA's request at 8.6% and the House's proposed 6.4%. That is more than enough to cover the FAA's safety regulation and miscellaneous non-ATC functions if all ATC activity is shifted to ATC fees and charges when the Air Traffic Organization is corporatized.</p>
<p><span class="GramE"><span style="text-decoration: underline;">NATS London Airspace Changes Approved</span>.</span> U.K. safety regulator Civil Aviation Authority has approved the London Airspace Management Program (LAMP) proposed by NATS, the U.K.'s corporatized air navigation service provider. Phase 1a will implement a Point Merge system for flights terminating at London City Airport, eliminating holding patterns over Southeast England. Point Merge will sequence arrivals by adjusting their flight times while en-route to London City Airport. LAMP is part of a larger Future Airspace Strategy being developed jointly by NATS and the Irish Aviation Authority (IAA) to redesign airspace within the U.K. and Ireland Functional Airspace Block, part of the Single European Sky effort.</p>
<p><span class="GramE"><span style="text-decoration: underline;">FY 2016 FAA Budget Includes Funding for Space-Based ADS-B</span>.</span> Although the FAA has not yet made a decision about signing up for space-based ADS-B services for the oceanic airspace for which it is responsible, Congress has given it a nudge in that direction. The FY 2016 Omnibus budget agreement provides $15 million for FAA planning for such service, with a report due within 60 days to the House and Senate Appropriations Committees on the status of a final investment decision for the program. FAA had requested only $2 million for this purpose.</p>
<p><span style="text-decoration: underline;">FAA Faulted for Weaknesses in Controller Training Contract</span>. A new audit report from the DOT Office of Inspector General criticizes the FAA for not fully implementing OIG's 2013 recommendations before it awarded the successor to its troubled ATCOTS <span class="GramE">controller training</span> contract. It awarded the new contract without properly defining training requirements and validating training costs. Consequently, "it may encounter many of the same issues that compromised the success of the ATCOTS contract." The report is "FAA Has Not Sufficiently Addressed Key Weaknesses Related to Its ATCOTS Contract," ZA-2016-010, released Dec. 10, 2015</p>
<p><span class="GramE"><span style="text-decoration: underline;">Clarifications re Possible NATS Sale</span>.</span> U.K. reader Barry Humphreys took issue with several points in last issue's article about proposed privatization (via sale) of the U.K.'s NATS and Italy's ENAV. He notes that when the Airline Group (AG) several years ago sought to sell the majority of its 42% shareholding in NATS, the bid by Germany's DFS failed not because of political controversy but "because DFS could not meet the criteria set by AG for the sale." He also points out that the U.K. government has only said that it will "explore" such a sale.</p>
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<p><strong><a name="g"></a>Quotable Quotes</strong></p>
<p>"Fortunately, the first few [ATC] systems that were commercialized began to prove that fears about safety were unfounded. From that perspective, commercialization is a resounding success, as commercialized systems have been able to keep improving <span class="GramE">safety.</span> . . . Canada, Germany, and New Zealand, among others, have shown how commercialized systems are able to depart from the old ways. From government agencies that used to serve their political overlords, they became independent entities that serve the interests of their customers, the airspace users, first. They are now also able to be self-sufficient financially, not requiring any taxpayer subsidies: a must in fiscally constrained times. Commercialization has created leaner, more-focused organizations that are able to adapt more swiftly to rapidly changing operational and technological environments."<br /> &mdash;<span class="SpellE">Rui</span> Neiva, <span class="SpellE">Eno</span> Center for Transportation, "Conclusion and Policy Implications," <em>Institutional Reform of Air Navigation Service Providers: A Historical and Economic Perspective</em>, Edward Elgar Publishing, 2015, pp. 150-151</p>
<p>"The main thing about the [<span class="SpellE">Nav</span> Canada] model is that it's not about the technology. It's about the financing and the governance of the system. What's unique today is that we have a set of circumstances here that there is enormous consensus that we should do this. This is not a new idea. This has been floating around for decades. It was an idea that was proposed in the Clinton administration. It was endorsed by numerous studies. Every time there's been a study about how to make air traffic more efficient, this concept has been raised. What's happened [now] is we have a growing consensus that the status quo is simply not acceptable. And the main part that's not acceptable is the uncertainty of financing in the federal budget. It's not that we can fix that just by saying we'll give it more money. That's not how it works; the way that government entities have to spend their money, they have to do it on an annualized basis. So you have an organization that has to make huge investments in capital, and it doesn't have the tools to do it as we do in the private sector. If we had to buy all our airplanes with cash generated in the year that we're buying airplanes, we'd have the smallest fleets in the world. But we can go to the capital markets; we can engage in long-term planning with a great deal of certainty that we'll have the resources."<br /> &mdash;Will Ris, Senior Vice President, American Airlines, "Across the Aisle from American's SVP of Government Affairs on Why Privatization of Air Traffic Control Is Good (and Shouldn't Be Called Privatization)," <em>The Cranky Flier</em>, Dec. 14, 2015</p>
<p>"What we are essentially doing is breaking the link between the airspace and the physical <span class="SpellE">centre</span>. Spreading our software across <span class="SpellE">centres</span> means that any position at either <span class="SpellE">centre</span> could manage any airspace."<br /> &mdash;Simon Daykin, Chief Architect, NATS, quoted in "Game Changer," <em>Air Traffic Management</em>, Issue 4, 2015</p>
<p>"Realistically, not all ANSPs&mdash;especially smaller ones&mdash;can afford a complete infrastructure overhaul to support ADS-B surveillance. The benefit of space-based satellite ADS-B is that its delivery method does not require such action. ADS-B information broadcast from the aircraft will be received by the <span class="SpellE">Aireon</span> payload installed on Iridium NEXT satellites, which will then transfer aircraft data from satellite down to <span class="SpellE">Aireon's</span> ground-based teleport <span class="GramE">network.</span> . . . Space-based ADS-B will complement our existing surveillance systems, as well, enabling us and other ANSPs to optimize current surveillance infrastructure and improve reliability while reducing costs."<br /> &mdash;Ho Wee Sin, Head of Surveillance, CAAS Singapore, "Enabling the Dawn of Space-Based ADS-B," <em>Air Traffic Management</em>, Issue 4, 2015</p>
<p>"If there is a possibility of certainty and stability for FAA employees, airports, and operators&mdash;then by all means we should consider it. [Chairman] Bill Shuster has given us the broad strokes of a plan that quickly is becoming more about looking at the 'devil in the details.' This is especially true for something as ambitious and <span class="GramE">broad-reaching</span> as what is being proposed. A number of questions immediately pop up that all need solid answers. How do we transfer employees from the FAA to this new corporation? What happens with pensions? Benefits? Seniority?&nbsp; <span class="GramE">. .</span> .&nbsp; I'm sure I'm not the only one with similar questions, and I look forward to discussing these concerns with Chairman Shuster."<br /> &mdash;Rep. Daniel Lipinski (D, IL), "Aviation&mdash;A Vital U.S. Economic Driver," <em>Managing the Skies</em>, November/December 2015</p>
<p><a href="#top">&raquo; return to top</a></p>1014428@http://www.reason.orgWed, 20 Jan 2016 12:49:00 ESTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #125http://www.reason.org/news/show/air-traffic-control-newsletter-125
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">ATC corporation: progress and dissent</a></li>
<li><a href="#b">ATCA magazine on ATC restructuring</a></li>
<li><a href="#c">Corporation, yes; user fees, no?</a></li>
<li><a href="#d">Cybersecurity a serious aviation problem</a></li>
<li><a href="#e">ANSPs and controller training</a></li>
<li><a href="#f">New life for GPS backup effort</a></li>
<li><a href="#g">News Notes</a></li>
<li><a href="#h">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>ATC Corporatization: Progress and Dissent</strong></p>
<p>As the prospect of taking the Air Traffic Organization out of FAA and reconstituting it as a self-supporting air navigation service provider (ANSP) draws closer, many supporters and opponents are making stronger statements about their positions&mdash;while a few seem to be hedging their bets.</p>
<p>House Transportation &amp; Infrastructure Committee chair Rep. Bill Shuster (R, PA) had planned to unveil the draft bill language for a federally chartered nonprofit ATC corporation the week of July 6<sup>th</sup>, but at the last minute that decision was rescinded by House GOP leadership, allegedly due to lack of floor time to debate the bill until after the August recess. But a brief summary of the overall reauthorization bill was posted on the T&amp;I website the next week. The two-page Aviation Innovation, Reform, &amp; Reauthorization Act summary included six bullet points about the proposed "independent, not-for-profit corporation, to operate and modernize the ATC system," along with other sections dealing with streamlining FAA certification, enhancing aviation safety, improving consumer service, modernizing airport infrastructure, and integrating unmanned aircraft systems into the airspace.</p>
<p>Pulling the draft ATC portion disappointed the organizers of the Transportation Research Board's July 7<sup>th</sup> "Air Traffic Control Symposium on Organizational Reform Options." The event drew a large in-person attendance, supplemented by scores of online attendees. Former senior DOT official Jeff Shane's opening address put the ATC reform effort in historical context, as he urged stakeholders not to let the current opportunity (at long last) slip through their fingers. Panelists discussed the disappointing accomplishments of the reform that created the Air Traffic Organization (Russ Chew), the Clinton/Gore government corporation proposal (Dorothy Robyn), the idea of corporatizing the entire FAA (Craig Fuller), a federally chartered nonprofit corporation (Robert Poole), and retaining the status quo (Kevin DeGood). Subsequent panels related the successful stories of ANSPs overseas, with participants from Canada, France, Germany, Ireland, and the U.K., as well as a summary of MITRE's findings that safety regulation improved after ATC corporatization overseas. A stakeholders' panel revealed nothing new&mdash;airlines and NATCA for reform, airport groups waiting to see how airports would fare, AOPA preferring continued use of fuel taxes in any new structure, NBAA adamantly opposed, and likewise technicians' union PASS.</p>
<p>Separate from that event, several other stakeholders have expressed potential support. At a recent conference, Regional Airline Association interim president Faye Malarky Black said that although RAA has not yet taken a position, it does see "a compelling case for taking [ATO] offline," adding that "We are uniquely vulnerable to inefficiencies of the current system." The FAA Managers Association (FAAMA) released a statement in its May/June magazine outlining four principles for any ATC restructuring&mdash;including that FAA managers be involved in the design and transition, that there be solid funding reform, that the new structure must permit real business decisions, and that current employee benefits be protected. And the Aerospace Industries Association, while noting airline support for corporatization and AOPA and NATCA willingness to discuss it, said that the complex challenges could lead to a lengthy transition and hoped that the main problems can be fixed "without uprooting the entire system."</p>
<p>But the Establishment has begun what appears to be an effort to create fear, uncertainty, and doubt. FAA's Edward Bolton said in June that NextGen delays should not be used as a reason for "privatization" of the ATC system, and warned of a "seven-year transition period" that would be disruptive. In early July, Administrator Michael Huerta warned in a speech that corporatization would not, by itself, address underlying safety problems or potential dangers of unintended consequences. DOT Secretary Anthony Foxx joined in on July 8<sup>th</sup>, saying that FAA has "done exceptionally well" with modernization and questioned whether there would be meaningful benefits from moving to a different structure. Rep. Peter DeFazio (D, OR), the ranking Democrat on the T&amp;I Committee, has increasingly called for shifting the entire FAA into some kind of corporate entity (which is the proposal being mulled over by the FAA's Management Advisory Council).</p>
<p>Most troubling of all, in my view, is Administrator Huerta's call for a unified industry position on reform. Since most key stakeholder groups have expressed willingness to discuss and potentially fine-tune an ATC corporation proposal, the demand for unity would, in effect, hand veto power to NBAA. That organization is just about the only key stakeholder (other than PASS, a much smaller FAA union than NATCA) that is adamantly opposed to any form of ATC corporation. If nothing can be done without the blessing of a relatively small stakeholder, aviation policy-making in this country will have reached a new low.</p>
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<p><strong><a name="b"></a>ATCA Magazine on ATC Corporations</strong></p>
<p><em>The Journal of Air Traffic Control</em>, published by the Air Traffic Control Association (ATCA), devoted the bulk of its Summer 2015 issue to the cover theme: "Privatization: Examining the Potential Solutions to FAA Reform." The content provides a useful indication of how far this subject has come in the last few years.</p>
<p>Book-ending the whole set of articles on this topic were contributions from me ("Corporatizing the U.S. ATC System") and by former Air Traffic Organization COO David Grizzle ("The What and Why of it All"). My piece was a slightly edited version of my written testimony before the House Aviation Subcommittee, drawing on research to show how a self-supporting ANSP governed by a stakeholder board could solve the inter-related problems of funding, governance, and culture that beset the ATO. And David Grizzle fleshed out what such a corporation would look like: structure, board composition and governance, assets acquisition, employee transitions, revenue, regulation, and the perennial questions of transition and scale.</p>
<p>Two long-term veterans in the decades-long effort for ATC reform, Frank Frisbie and Chip Barclay, each provided provocative articles. Frisbie, an FAA veteran, set forth a "half a loaf" transition proposal, under which all high-altitude en-route ATC would be privatized, possibly via investment and management by an existing (non-US) ANSP or a newer entity such as Aireon. He cited as precedents the creation of Eurocontrol for a portion of the high-altitude airspace in Europe and the outsourcing of Flight Service Stations by FAA. Barclay's piece cited the precedent of separating Dulles and National Airports from the FAA in the mid-1980s, setting up a self-funding airport authority to improve and manage the airports. He also pointed out that no other entity in the federal government operates the "production line" for a major industry. So the ATC system should be separated and run commercially, with the FAA responsible for safety regulation and the protection of aviation stakeholders with "minority economic influence"&mdash;e.g., general and business aviation.</p>
<p>The issue's other contributors included Kevin Burke of Airports Council International-North America, Paul Rinaldi and Dale Wright of NATCA (each with separate articles), and two articles about Nav Canada, one by CEO John Crichton and the other by Communications Director John Morris. All in all, a very thorough treatment of the subject.</p>
<p><em>The Journal of Air Traffic Control</em> is available at no charge to ATCA members. In this particular case, ATCA has agreed to make the content of this issue available to readers of this newsletter. To download the issue: <a href="http://www.atca.org/Uploads/Journal/ATCA%20Journal%20Summer%20Q2%202015%20FINAL%20lr.pdf">www.atca.org/Uploads/Journal/ATCA%20Journal%20Summer%20Q2%202015%20FINAL%20lr.pdf</a>.</p>
<p>And to join ATCA, email Tim Wagner: <a href="mailto:tim.wagner&#64;atca.org">tim.wagner&#64;atca.org</a>.</p>
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<p><strong><a name="c"></a>Corporation, Yes; User Fees, No?</strong></p>
<p>As momentum builds for reform of the funding, structure, and governance of the U.S. ATC system, the rhetoric from general aviation groups appears to be softening, at least on the idea of organizational and governance change. AOPA President Mark Baker recently noted in <em>AOPA Pilot </em>that, "I think almost everyone agrees the FAA is in need of an overhaul in many areas, but it's vital that any changes protect the interests of all system users, including GA, while ensuring the highest levels of safety." I certainly can't quarrel with that.</p>
<p>But in the same article, Baker reports that he recently met with T&amp;I Committee chairman Shuster and told him that user fees for GA are not acceptable. "The fuel tax system we already have in place is effective and cost-efficient. It works, and we believe it's the right way to fund aviation going forward." Moreover "We know from the experience of other nations that user fees can stifle general aviation, restrict access to airports and airspace, and prevent pilots from using the safety services they need&mdash;and that's why AOPA won't support user fees in any form."</p>
<p>I'm sure Baker is sincere in his belief, but that position is at odds with solving the problems that ATC corporatization is intended to address. A major funding problem is that annual appropriations by Congress are subject to cutbacks in response to overall federal budget problems (remember partial FAA shutdowns, controller furloughs, and the plan to shut down several hundred contract towers?). Those revenues are also not bondable, which means major capital improvements have to be done in dribs and drabs, rather than being financed by revenue bonds, as new airport runways and terminals are. None of this can be changed if the funding continues to be from taxes.</p>
<p>Another serious problem is micromanagement. The revenue from every federal tax, including the GA fuel tax, gets deposited in the U.S. Treasury. It can only be spent if and when Congress decides to spend it. But everything funded by federal tax money is subject to "oversight" by congressional committees, the GAO, and the DOT Inspector General, to make sure taxpayers' money is not wasted. And while there is some value in this continual and extensive oversight, it ends up diverting huge amounts of ATO management time and attention to responding to the overseers&mdash;rather than focusing on how to best serve its ATC customers. If even a few percent of the ATC corporation's budget comes from taxes, that opens the door to all the same "oversight" that makes it impossible for today's ATO to operate as a business.</p>
<p>General aviation is, indeed, a special case, because charging for every flight, or every landing and takeoff, would quickly make GA flying unaffordable for large numbers of private pilots. And that is why many of us look to the non-profit, stakeholder-governed corporation model that is exemplified by Nav Canada. Since its creation in 1996, Nav Canada has charged piston GA planes only a small <em>annual fee</em>, analogous to your annual car registration, that for most private pilots is $68/year.</p>
<p>AOPA's top management and a number of its board members have visited Nav Canada and know that it does not charge per-flight "user fees" to GA planes. If it is serious about fixing the many problems that afflict our ATC system, AOPA should acknowledge that nobody (to the best of my knowledge) is advocating the kind of "user fees" that AOPA has fought against for several decades. If the draft ATC corporation legislation calls for adopting a fee system similar to Nav Canada's&mdash;with an annual "registration fee" for piston GA&mdash;AOPA should declare victory and work with other aviation stakeholders to fine-tune the governance structure to ensure that it properly protects GA's interests.</p>
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<p><strong><a name="d"></a>Cybersecurity Acknowledged as a Serious Aviation Problem</strong></p>
<p>When I reported (in the May issue) on the Government Accountability Office's report on the need for FAA to get more serious about cybersecurity threats, several readers suggested that such threats were being exaggerated. But subsequent events have changed that assessment.</p>
<p>June produced a wake-up call, with the news that hackers had penetrated the flight-planning computer system of Polish airline LOT, leading to the grounding of at least 10 planes at the Warsaw airport. Late in June, the FAA issued a draft Advisory Circular (AC) on the need to develop an aircraft network security program. Its primary focus is aircraft that rely on Transmission Control Protocol/Internet Protocol (TCP/IP) connectivity, instead of older means such as ARINC 429 buses, for connecting flight-critical avionics systems. The AC noted that, "As with other TCP/IP applications, a real threat exists that may be intentional or unintentional with a detrimental effect on system performance."</p>
<p>Both the <em>Wall Street Journal</em> and <em>eWeek</em> reported that FAA has set up a high-level advisory committee focused on cybersecurity risks, hoping to reach consensus on international design and testing standards to protect against cyberattacks. While both Airbus and Boeing maintain that their onboard systems are adequately protected from hacking, the greatest concern appears to be ground networks that link ATC facilities and that send information to aircraft, both on the ground (e.g., preflight clearances) and in the air. It appears that neither ADS-B nor controller-pilot data link communications (CPDLC) are encrypted. Also of concern are airline systems that upload information such as required fuel loads.</p>
<p><em>Nextgov.com</em> discovered that the FAA itself has recently been the victim of a cyberattack. While the agency does not disclose such attacks, the clue was its hiring of SRA International to deal with this vulnerability.</p>
<p>Aviation cybersecurity is a global problem, and the European Aviation Safety Agency held its first workshop on the subject in May. The International Air Transport Association is also engaged on the issue. IATA Director General Tony Tyler has urged regulators to share information beyond their borders. He also told <em>Dow Jones Business News</em> that a report the organization had commissioned suggested that "airlines are the highest-value target for swindlers, and close to 50% of all phishing attempts are made against airlines and airline passengers."</p>
<p>The growing attention to aviation cybersecurity is overdue, especially since so much of ATC modernization depends on TCP/IP applications. Dealing with cybersecurity vulnerabilities may further delay some NextGen programs, but that is a price aviation will have to pay.</p>
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<p><strong><a name="e"></a>Entrepreneurial ANSPs and Controller Training</strong></p>
<p>Being a self-supporting ANSP means not just the ability to run a country's ATC system as a customer-focused business. It also includes the possibility of generating revenue from offering related services. I have previously reported that several ANSPs, such as DFS (Germany) and NATS (UK) have business units that operate control towers under contract to the airports that own them. Another line-extension is offering controller training and related services.</p>
<p>Perhaps the grand-daddy of controller training providers is Airways New Zealand, the first ATC provider to be corporatized (in 1987). As detailed in an article in <em>Air Traffic Management</em> (Issue 2, 2015), its first overseas clients were the small ANSPs of nearby Pacific island countries. That training business evolved to serving ANSPs in China, Hong Kong, Vietnam and the Middle East (Oman, Saudi Arabia, UAE). To better serve its growing international business, Airways in recent years has established three overseas training facilities, each in cooperation with a local university: San Juan (to serve Latin America and the Caribbean), Dubai (Middle East and Africa), and Beijing (China). These days, domestic (New Zealand) controller training makes up only about 25% of the total, generating healthy cash flows for Airways.</p>
<p>Airways Training Manager Kelly de Lambert told <em>Air Traffic Management</em> that, "Airways have identified requirements for a broader range of skills and competencies to meet future challenges for the provision of air navigation services. Incorporating ATC training as part of a university degree will ensure the workforce is equipped to lead important strategic initiatives." That sounds like the philosophy that led to creation of the Air Traffic Collegiate Training Initiative (CTI) here in the United States.</p>
<p>Another large and growing provider of controller training is Entry Point North, created in 2005 as a joint venture by several northern European ANSPs. Today it is jointly owned by Avinor (Norway), IAA (Ireland), LFV (Sweden), and Naviair (Denmark). It has three training centers&mdash;in Sweden, Ireland, and Hungary&mdash;and also offers training services at client ANSP facilities. It has served more than 80 clients from 29 countries in its 10-year history. Last month it announced the development of a tower simulator facility in Denmark, with five tower positions and 10 pilot simulator positions, to be operated by Naviair to train controllers for all its towers.</p>
<p>Several other ANSPs have recently announced training contracts. NATS won a multi-year contract with Avinor to provide initial training for student controllers at the NATS academy in Hampshire. And last month Skyguide of Switzerland announced a contract with Integra AS to develop and operate the Integra Tower Training Center for Avinor in Oslo. It will be used primarily for transitional and continuing training of tower controllers.</p>
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<p><strong><a name="f"></a>New Life for GPS Backup Efforts</strong></p>
<p>Growing awareness of the vulnerability of GPS signals to interference and jamming led FAA to abandon early NextGen plans to eventually scrap most legacy ground-based navigation equipment (e,g,, VORs, secondary radars), in order to have a residual capability for surveillance and navigation in the event of large-scale unavailability of GPS signals. This undercut a significant part of the business case for NextGen.</p>
<p>But the problem affects far more than just aviation. GPS today is the primary means of providing precise information for positioning, navigation, and timing (PNT) for much of the economy&mdash;including the power grid, the financial system, the mobile phone network, the Internet, surveying, agriculture, and personal navigation systems. Organizations such as the National Space-Based PNT Advisory Board argue that the country needs an overall backup or complement for GPS that can provide all three capabilities (P, N, and T). After an exhaustive evaluation of candidates back in 2007, an expert panel commissioned by the Departments of Defense and Homeland Security recommended that a modernized version of the low-frequency LORAN system&mdash;called Enhanced LORAN (eLORAN) be implemented. Both agencies endorsed that recommendation in 2008, but the plan sank without a trace in the early years of the Obama administration, apparently for budget-cutting reasons.</p>
<p>But today things seem to have changed. Last year saw the release of the <em>2014 Federal Radionavigation Plan</em>, which states that it is now a federal policy objective for the government [and presumably the rest of the country] not to be critically dependent on a single system for PNT. That plan was released jointly by the Secretaries of Defense, Homeland Security, and Transportation. Early this year, the U.S. DOT posted a <em>Federal Register</em> notice inviting public comments on potential plans for the government to implement an eLORAN system as a complementary PNT capability. The comment period closed on May 22<sup>nd</sup>.</p>
<p>That same month the Department of Homeland Security and the U.S. Coast Guard announced a one-year cooperative research and development agreement with Exelis/Harris and UrsaNav to evaluate eLORAN as a potential PNT complement to GPS. On June 19<sup>th</sup>, the team began the first broadcast of eLORAN signals from a decommissioned LORAN-C site in Wildwood, NJ. Throwing the switch was Rep. Frank LoBiondo (R, NJ), currently chair of the House Aviation Subcommittee as well as a member of the Armed Services Committee.</p>
<p>Not everyone in aviation thinks eLORAN is the best solution for aviation. It provides two-dimensional positioning, not three&mdash;but altitude data is readily available on aircraft via conventional altimeters. And for terrestrial users, eLORAN signals penetrate concrete in urban areas, offering performance far superior to GPS for those applications. <em>InsideUnmannedSystems.com</em> has suggested in recent articles that eLORAN could be a good fit for unmanned aerial systems (UASs) operating at low altitudes in urban areas&mdash;e.g., for proposed delivery services. Prof. Girish Chowdhary of Oklahoma State University, who is working on UAS navigation systems, notes that the eLORAN signal is 1.3 million times stronger than that of GPS, and is virtually invulnerable to jamming or interference.</p>
<p>Exelis/Harris and UrsaNav will be exploring the UAS potential during their year-long research and development project. One of their goals is to figure out how to reduce the size, weight, cost, and power requirements of airborne eLORAN receivers, similar to what has taken place with GPS receivers over the past two decades. Their primary task is to identify both the strengths and weaknesses of eLORAN for the full array of PNT functions. From everything I've read in recent years, it sounds very promising. But we won't know for sure without serious R&amp;D, of which this project is a good start.</p>
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<p><strong><a name="g"></a>News Notes</strong></p>
<p><span style="text-decoration: underline;">FABEC States Ordered to Implement Functional Airspace Block</span>. The five member states responsible for the largest of nine planned Functional Airspace Blocks (FABs) in the Single European Sky plan have been ordered by the European Commission to complete implementation of their FAB, named FABEC, within two months. Member states Belgium, France, Germany, Luxembourg, and the Netherlands have <em>defined</em> direct routings through their airspace but have not implemented them, apparently due to a combination of projected revenue losses and union opposition. Only two FABs are fully compliant with the plan (the Danish-Swedish FAB and the North European FAB of Estonia, Finland, Latvia, and Norway).</p>
<p><span style="text-decoration: underline;">Aireon and Isavia Sign MOU</span>. Space-based ADS-B provider Aireon has signed another Memorandum of Understanding with an ANSP, this time with Iceland's &nbsp;Isavia. They will explore the implementation of Aireon service in Isavia'a North Atlantic and Polar airspace, provided in the Reykjavik Flight Information Region and the Reykjavik Oceanic Control Area. Aireon is already working on such plans with North Atlantic ANSPs Nav Canada and NATS.</p>
<p><span style="text-decoration: underline;">First Cross-Border ATC Communications Center</span>. The Irish Aviation Authority (IAA) and Iceland's Isavia are developing identical voice communications control systems, able to operate as a single Virtual Center. In the event that one of them goes off-line, the other would be available to provide uninterrupted service. The system will provide HF, VHF, and SatVoice operations in the Shanwick and Reykjavik flight information regions (FIRs).</p>
<p><span style="text-decoration: underline;">NATS Renews Belfast Control Tower Contract</span>. UK air navigation service provider NATS has signed an extension of its control tower operations contract with Belfast International Airport, extending the five-year contract term to seven years. The extension will facilitate the completion of ongoing projects to replace the airport's instrument landing system (ILS) and upgrading its semi-automatic meteorological observation system (SAMOS).</p>
<p><span style="text-decoration: underline;">Honeywell Nears Cat. 2 Capability for GBAS</span>. An important upgrade for Honeywell's Smartpath GPS-based landing system will be available by the end of summer to provide more-precise Category 2 landing capability. The current Cat. 1 system requires the cockpit crew to be able to see the runway at 200 ft. altitude while approaching the airport, but with Cat. 2, this "decision height" is reduced to 100 ft. The upgrade to the ground-based system involves a software modification that makes use of data on the real-time behavior of the ionosphere (from the FAA WAAS system). That additional information modifies a worst-case assumption built into the Cat. 1 system. No changes are needed on planes already equipped to use Smartpath for Cat. 1 landings.</p>
<p><span style="text-decoration: underline;">Airservices Australia Meets ICAO 14-Minute Oceanic Update Rate</span>. Australia's ANSP announced last month that it has achieved the new monitoring capability set forth by ICAO under which planes in its oceanic airspace will provide position updates every 14 minutes via ADS-C, via satellite provider Inmarsat. The new policy covers oceanic airspace under control by Airservices Australia both east and west of the country. The trials that began in January included only Qantas and Virgin Australia, but were subsequently expanded to all airlines serving Australia. The next phase will involve working with ANSPs of New Zealand, Indonesia, Malaysia, South Africa, and the FAA.</p>
<p><span style="text-decoration: underline;">Ryanair Petition to Outlaw ATC Strikes</span>. In response to a rash of strikes and proposed strikes by air traffic control unions in Europe, discount airline Ryanair early this month launched an online petition urging that such strikes be made illegal (as they are in the United States). Interestingly, the petition offers the alternative of allowing other European ANSPs to manage the airspace of a country whose controllers are on strike. Ryanair's Kenny Jacobs said that it is "unacceptable that Europe's customers repeatedly have their holiday and travel plans disrupted or cancelled by the selfish actions of ATC unions every summer. . . . If the EU won't listen to the airlines, perhaps they'll listen to Europe's citizens."</p>
<p><span style="text-decoration: underline;">Video of TRB Symposium on ATC Reform Options</span>. A video of the entire one-day symposium put on by the Transportation Research Board on July 7<sup>th</sup> is available online, and individual sessions can be viewed separately. I was a member of the steering committee that organized the event, and took part in one of the morning panels. Go to <a href="http://www.trb.org/PolicyStudies/Blank6.aspx">www.trb.org/PolicyStudies/Blank6.aspx</a>.</p>
<p><span style="text-decoration: underline;">Update on Controller Pilot Data Link Communications (CPDLC)</span>. Reader Matthew Ross emailed following the June issue of this newsletter. After noting my point that FAA plans its roll-out of CPDLC to en-route airspace in 2021, he reported that CPDLC has been available in Australian en-route airspace, both continental and oceanic, since 2000.</p>
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<p><strong><a name="h"></a>Quotable Quotes</strong></p>
<p>"When I first started in the airline business 20 years ago, the scheduled time for our flights between our Newark/New York hub and Washington National Airport was about an hour. Today, many of these flights are scheduled for about an hour and a half. I'm pretty sure that the tectonic plates haven't caused the cities to drift 50 percent farther apart during that time. Instead, our nation's air traffic control system, which relies on World War II-era ground-based radar technology, has become increasingly inefficient. That means you as customers must spend more time on the ground and in the air while traveling the same distances as you did before, and we as airlines must incur higher operating costs and burn more fuel simply to get from point A to point B. This antiquated and inefficient system, while safe, threatens the primacy of U.S. aviation."<br /> &mdash;Jeff Smisek, CEO, United Airlines, "Are New York and Washington, DC Drifting Apart?" <em>Hemispheres</em>, July 2015</p>
<p>"There is nothing more difficult to take in hand, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old order of things, and lukewarm defenders in those who may do well under the new."<br /> &mdash;Niccolo Machiavelli, <em>The Prince</em>, 1532</p>
<p>"When considering a big departure from the conventional approach to something, just pretend that the big departure had been our policy from the get-go, and somebody is now proposing that you change to the policy you actually have. . . . So now imagine that the United States had set up its air traffic control system as a not-for-profit corporation at the outset. It has always been funded by user fees, it has long enjoyed access to the bond market, and it has managed upgrades in keeping with a disciplined capital budget. Now somebody comes along and proposes that we abandon that structure and place the system within the FAA. Our premier aviation safety regulator would now be dual-hatted as a provider of air traffic services as well. No borrowing authority, a newfound fealty to federal procurement regulations, and with funding based on a complicated assortment of taxes and fees. It seems pretty clear that we would never accept a change to the structure we currently have if it were being proposed now for the first time. It's not easy to understand, therefore, why we cling to that structure so slavishly."<br /> &mdash;Jeffrey N. Shane, General Counsel, IATA, keynote address to the TRB Air Traffic Control Symposium on Organizational Reform Options, July 7, 2015</p>
<p><a href="#top">&raquo; return to top</a></p>1014329@http://www.reason.orgTue, 28 Jul 2015 22:24:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #124http://www.reason.org/news/show/air-traffic-control-newsletter-124
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">Answering arguments against ATC corporatization</a></li>
<li><a href="#b">New revelations about FAA's revised controller hiring</a></li>
<li><a href="#c">Specious claims about Nav Canada's fees</a></li>
<li><a href="#d">Controller-pilot data link 25 years late</a></li>
<li><a href="#e">Delivery drones and ATC</a></li>
<li><a href="#f">FAA air traffic forecast numbers increase, slightly</a></li>
<li><a href="#g">Upcoming Event</a></li>
<li><a href="#h">News Notes</a></li>
<li><a href="#i">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>New Arguments Raised Against ATC Corporation</strong></p>
<p>Since last month's issue, the effort to take the Air Traffic Organization out of the FAA and reinvent it as a self-supporting, stakeholder-governed corporation, has continued to move forward. But now that this prospect appears likely to happen, new arguments are being raised by defenders of the status quo.</p>
<p>On the positive side, the Senate Commerce Committee held a hearing on the issue May 19<sup>th</sup>. Witnesses favoring corporatization included United Airlines CEO Jeffrey Smisek representing Airlines for America (A4A), Gov. John Engler representing the Business Roundtable, and former Sen. Byron Dorgan representing the Eno Center for Transportation. Paul Rinaldi, president of the National Air Traffic Controllers Association repeated his openness to any reform alternative except a for-profit company (which no one has proposed), and FAA Administrator Michael Huerta again expressed openness to discussing restructuring, but also repeated his concerns about separating safety regulation from air traffic control. The only witness defending the status quo was Ed Bolen, president of the National Business Aviation Association (NBAA). Several weeks later, House Transportation &amp; Infrastructure Committee chairman Bill Shuster (R, PA) told the Aero Club of Washington that committee staff are drafting a bill that would convert the ATO into a federally chartered, non-profit, self-supporting ATC corporation.</p>
<p>What distresses me at this juncture is that despite decades of research and the highly positive track record of the more than 50 self-supporting ANSPs worldwide, in countries of all sizes, many of the arguments being made against the idea ignore all this evidence. Whether this is out of insufficient knowledge (as I'm sure is the case for some) or deliberately ignoring such information is really beside the point. Most reporters, editorial writers, and members of Congress can hardly be expected to be experts on ATC funding, governance, and culture. Thus, opponents of reform can make spurious arguments which, if they sound good to ill-informed listeners, can be very damaging. Therefore, supporters of ATC reform need to be ready to respond to such arguments, answering them with facts and logic.</p>
<p>Here are six arguments being aired today by opponents.</p>
<p><span style="text-decoration: underline;">Calling it "Privatization"</span>&nbsp; For example, in a 10-page opinion piece for the Center for American Progress, Kevin DeGood agrees that the term "privatization" generally means turning a government function over to a <em>for-profit</em> company, and acknowledges that this is on nobody's ATC reform agenda. He nevertheless proceeds to use the term throughout his piece, as do quite a few other people. That term tends to create visceral negative reactions among various groups, including public employee unions, and certainly does not contribute to a meaningful discussion of what is actually being proposed.</p>
<p><span style="text-decoration: underline;">"Turning ATC Over to Special Interests"</span> In his Senate testimony, Ed Bolen referred repeatedly to "special interests" as being in charge of the proposed ATC corporation, contrasting this with the status quo in which Congress is the de-facto board of directors. All serious reform proposals call for the governing board of the new entity (whether government corporation or nonprofit corporation) to be a fully representative group of aviation stakeholders, with a fiduciary duty not to any industry body but to the best interests of the ATC corporation. This is the principle on which RTCA's NextGen Advisory Committee (NAC) has worked diligently and effectively to develop consensus recommendations for the FAA. People nominated by general and business aviation, the several sectors of the airline industry, airports, ATC employees, and others would constitute the stakeholder board.</p>
<p><span style="text-decoration: underline;">Confusing Taxes with ATC Fees</span>. DeGood clearly does not understand the current proposals, for he writes that "the new ANSP must have a steady stream of tax revenue," and that proponents seek "to redirect the flow of trust fund revenues so that air traffic operations and procurement are fully funded by aviation taxes." That is exactly the <em>opposite</em> of what proponents want, which is to make the ATO fully independent of any tax funding, to free it from micromanagement by the executive and legislative branches of government. Bolen argues that Congress must not "turn over its power to tax" to an ATC corporation, and states that this would be unconstitutional in any case. But it is clearly within the power of Congress to create a corporation able to charge <em>fees</em> for its services: Amtrak, the Postal Service, and the Tennessee Valley Authority all charge fees&mdash;not taxes&mdash;for the services they deliver to customers. ATC fee schedules would be worked out by the stakeholder board, and subject to appeal to an external authority, probably the DOT Secretary.</p>
<p><span style="text-decoration: underline;">An Imagined Aviation Funding Shortfall</span>. DeGood claims that what he calls privatization is "a bold attempt by the aviation industry to carve out operations and procurement activities along with most or all [Trust Fund] funding, while dumping responsibility for remaining FAA functions onto taxpayers." He also mistakenly claims that ATC is only 50% of the FAA budget (in fact, it is about 63%) and that the general fund covers 30% of the FAA budget (it was 17% in FY 2014 and only 7.2% in FY 2015)&mdash;but his erroneous numbers create the impression of a huge funding gap for airports and FAA's safety regulatory activities. In fact, ATC reformers favor shifting full support of ATC from taxes to fees paid directly to the corporation. They also support retaining an aviation excise tax to pay for all or part of AIP grants (22% of FAA budget), and most favor general fund support for FAA safety and miscellaneous functions (15% of the FAA budget).</p>
<p><span style="text-decoration: underline;">Conflating User Fees and User Taxes</span>. Several groups invoke the specter of the Obama Administration's proposed $100/flight "user fee" as an example of what they fear. That was not a user fee; it was at best a proposed <em>user tax</em>. A user tax is paid to the government, deposited in the Treasury, and can only be spent if authorized and then appropriated by Congress. By contrast, a true user <em>fee</em> is a charge for service&mdash;like the bills sent out by TVA for the electricity that customers use. The Alliance for Aviation Across America worries that the new ATC corporation would charge fees for every take-off and landing, raising the cost of flying for business and general aviation serving smaller and rural communities. By now, everyone should know that corporation proponents favor a fee schedule similar to Nav Canada's, in which piston GA planes pay a small annual fee (under $100 for most)&mdash;period. Business jets do pay weight-based ATC fees, but the Canadian Business Aviation Association is a big fan of Nav Canada, and considers the fees it pays to be good value, considering the improved service they receive. Exactly what and how business jets would pay here is a matter for the stakeholder board to determine&mdash;and business aviation will have a seat at that table.</p>
<p><span style="text-decoration: underline;">Relinquishing Control Over the Rules of the Air</span>. The recent Congressional Research Service report raising constitutional questions about an ATC corporation was premised on a false assumption: that Congress would delegate to the corporation the power to decide on procedures, equipage, and other rules of the airspace. That misses the whole point about arm's-length separation between safety regulation (inherently governmental, not delegable) and carrying out the operation and management of the 24/7 service business of ATC (which can and already is being delegated&mdash;e.g., flight service stations and contract towers). Bolen's testimony raised the specter of the ATC corporation having the "sweeping authority to determine . . . who will have access to airspace and who will get shut out." And DeGood claims that "Privatizing air traffic operations and procurement would mean relinquishing control over many of these collective decisions and rules." <em>No it wouldn't</em>.</p>
<p>Incidentally, a succinct but detailed response to DeGood's piece was posted by Rui Neva, the ATC specialist at the Eno Transportation Center last month. Go to <a href="https://www.enotrans.org/eno-brief/a-few-clarifications-about-air-traffic-control-reform">https://www.enotrans.org/eno-brief/a-few-clarifications-about-air-traffic-control-reform</a>. Highly recommended.</p>
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<p><strong><a name="b"></a>New Revelations re FAA's Revised Controller Hiring</strong></p>
<p>An explosive documentary on FAA's use of a Biographical Questionnaire as the initial screening device for would-be air traffic controller trainees alleges that FAA employees enabled minority applicants to cheat, by providing them with "correct" answers to give on the unsupervised BQ, as well as suggesting changes to make on their resumes to increase their odds of being selected. "Trouble in the Skies" was researched over a six-month period by Fox Business Network reporter Adam Shapiro and colleagues, and aired May 20<sup>th</sup>. A complete transcript can be downloaded from: <a href="http://www.foxbusiness.com/industries/2015/05/20/trouble-in-skies">http://www.foxbusiness.com/industries/2015/05/20/trouble-in-skies</a>.</p>
<p>I have previously reported that the FAA Human Resources Dept. persuaded higher-ups in 2013 that then-current hiring practices&mdash;extending a preference to former military controllers and graduates of 30-odd FAA-sanctioned Collegiate Training Institute (CTI) colleges and universities&mdash;ended up with "too few" minorities and women in the applicant pool. In December of that year, the FAA disqualified about 3,000 such people who had already taken and passed the detailed, eight-hour controller aptitude test (called AT-SAT) and announced that they would all have to re-apply along with an unlimited number of "off-the-street" candidates. All would have to take the new Biographical Questionnaire (unsupervised, on their personal computers), and only those who passed it would be eligible to enter controller training. Large numbers of previously-accepted CTI graduates took the BQ and were subsequently told they failed and could therefore not enter training.</p>
<p>None of that information is new. What is new, thanks to Shapiro's reporting, is a recording provided by CTI graduate Moranda Reilly, provided to her and other members of the National Black Coalition of Federal Aviation Employees (NBCFAE), which she had recently been urged to join on grounds that it would increase her chances of being hired. The voice message came from FAA employee Shelton Snow, president of NBCFAE's suburban Washington, DC chapter. The recording (played on the broadcast) said Snow would be sending her (and other applicants) screen shots "so you will know which icons to select" when taking the BQ. "I am about 99 point 99 percent sure that it is exactly what you need to answer each question in order to get through the first stage." Reilly also said that Snow conducted workshops showing NBCFAE associate members the correct answers to select on the BQ, and key words to include on their resumes. Reilly told reporter Shapiro that <em>she</em> did not cheat&mdash;and ended up failing the BQ.</p>
<p>Shapiro did further digging, finding reports by human factors researcher Dana Broach, PhD, of the FAA Civil Aerospace Medical Institute in Oklahoma City. His October 2014 analysis of controller training outcomes by recruiting source found that "Overall, larger proportions . . . of CTI hires achieved CPC (Certified Professional Controller) status than did general public hires." Another Broach report, "Using Biodata to Select Air Traffic Controllers," finds that "the evidence for using these biodata items for controller selection is weak." According to Shapiro, "the FAA refused to let Broach talk to FoxBusiness."</p>
<p>Reilly's attorney, representing several CTI graduates who failed the BQ, has filed a complaint with the FAA's Equal Employment Opportunity Office, and may sue the FAA if they can obtain class action status. And Shapiro reported on June 22<sup>nd</sup> that FAA has denied a Freedom of Information Act request by one of the CTI students for information on "the empirical validation of the biographical assessment." The agency also says that for its 2015 recruiting, it has replaced the 2014 BQ with a new version.</p>
<p>Shapiro's reporting is having consequences. In addition to an op-ed in <em>The Wall Street Journal</em> by Jason Riley, "Affirmative Action Lands in the Air Traffic Control Tower" (June 2, 2015), the DOT Office of the Inspector General has initiated an audit of the process the FAA is now using to recruit new controllers, as well as the allegations about answers being provided to certain applicants. And these new developments will likely increase support in Congress for the Air Traffic Controllers Hiring Act of 2015, which would eliminate the BQ and return to the previous qualifications-based hiring process. The measure has bipartisan co-sponsors, including Reps. Randy Hultgren (R, IL), Dan Lipinski (D, IL), Vicky Hartzler (R, MO), Cheri Bustos (D, IL), Matt Salmon (R, AZ), Tim Ryan (D, OH), and Keith Rothfus (R, PA). Hultgren is urging Transportation &amp; Infrastructure chairman Bill Shuster (R, PA) to hold a hearing on FAA's hiring practices.</p>
<p>This episode is another sorry example of how politicized our ATC system has become. I cannot imagine anything like this happening in any country where ATC is run by a corporation dedicated to serving its aviation customers.</p>
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<p><strong><a name="c"></a>Spurious Claims About Nav Canada's Charges</strong></p>
<p>All over the world, except in the USA, air navigation service providers (ANSPs) charge airlines ICAO-blessed fees for their services. En-route charges are based on aircraft gross weight and distance flown, while terminal charges are based on gross weight alone. Those charges are normal operating expenses to airlines, along with airport landing fees, fuel, parking, etc. Unlike in the United States, where the federal ticket tax and segment fee are itemized as part of the ticket price, airlines don't break out their miscellaneous operating expenses; they just list the airfare, which (if they are well-managed), covers their costs and permits some degree of profit.</p>
<p>Except for Air Canada. Ever since the ATC function was separated from Transport Canada in 1996 and began to charge fees for its services (instead of the former Canadian ticket tax, which went away), this airline has added a per-passenger charge to its tickets, arrived at by dividing the per-flight ATC fee by the average number of passengers, and labeling it a "Nav Canada charge." This has led some people to think that ATC somehow costs more in Canada than it does elsewhere, where no such charges appear on people's tickets. Indeed, on one aviation forum earlier this month, someone posted Air Canada's "Nav Canada surcharge" for a typical short-haul A320 flight and suggested that this accounted for why Canadian airfares are generally higher (per mile) than those in the United States.</p>
<p>So I once again queried my sources at Nav Canada to get the straight story. They provided figures for U.S. and Canadian flights of comparable distances:&nbsp; Toronto-Ottawa (226 mi.) and Washington-New York (213 mi.). For an A320 flight within Canada, the actual Nav Canada ATC charge to the airline would be $1,385, which (at 85% load factor) works out to $11.17 per passenger. For the DCA to JFK flight, the ticket tax and segment fee (again based on 85% load factor) total $4,190&mdash;or $33.79 per passenger. That is three times as much as in Canada. But to make it a fair comparison, the U.S. number needs to be adjusted, because aviation excise taxes in the United States cover more than just air traffic control.</p>
<p>Here's my calculation, using FY 2014 FAA budget numbers. The aviation tax deposited in the Trust Fund was $13.18 billion (out of a total FAA budget of $15.89 billion). The capital and operating costs of the ATC system were $10.07 billion, equal to 76% of the user-tax revenue. So we need to multiply the previous per-passenger number by 76% to get the amount each passenger paid for U.S. ATC services. That number is $25.82. Instead of being three times as much as what Canadian passengers pay, it is only 2.3 times as much. But that still makes air traffic services in Canada a great value compared with those of the United States.</p>
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<p><strong><a name="d"></a>Controller-Pilot Data Link (CPDLC), 25 Years Late</strong></p>
<p>You probably read one or more breathless mass-media stories on May 22 or thereabouts, as FAA announced the completion of two years of testing of transmitting pre-departure clearances (PDCs) from control towers at Memphis and Newark to cockpit flight management systems (FMSs) of passenger and cargo planes waiting to push back at those two airports. A great step forward for NextGen! The wave of the future arriving today! And soon to be rolled out to three more airports by year-end: Houston Hobby, Houston Intercontinental, and Salt Lake City. And by the end of 2016, it will be in place at 56 airports.</p>
<p>What you almost certainly did not read was the reaction of a whole cadre of ATC experts, such as one that was shared with me on May 22<sup>nd</sup>:</p>
<blockquote>
<p>"FAA finally is implementing a basic Data Link service, for trajectory exchange between aircraft FMSs and [air traffic services] . . . and only 25 years after we already developed it, proved it, and implemented it with FANS 1, for the entire rest of the world's use, even making it standard in long-range fleets."</p>
</blockquote>
<p>Another expert recounted finalizing the FANS 1 installation for then-new Boeing 777s&mdash;in 1994.</p>
<p>I related the story of how FANS 1 came about, as the first of seven case studies on how FAA's status-quo culture has held back many promising innovations in air traffic management, in my 2014 Reason/Hudson study, "Organization and Innovation in Air Traffic Control." (<a href="http://reason.org/files/air_traffic_control_organization_innovation.pdf">http://reason.org/files/air_traffic_control_organization_innovation.pdf</a>) Another newsletter reader wrote that "When I was working on FANS 1 [at FAA], we heard that turning off HOST [the former en-route software system, replaced this year by ERAM] was 'about to occur.' I left the FANS 1 team in 1996, and the Australian system which incorporated the FANS 1 technology was commissioned in 1998. The tender for its replacement has just been awarded. That says it all for the FAA procurement and implementation process."</p>
<p>If you read John Croft's <em>Aviation Daily</em> story on the FAA's announcement (May 27<sup>th</sup>), you will learn that pre-departure clearance digital messaging for many years has been provided at 73 U.S. airports to the more than 700 US jetliners that are equipped with FANS 1A. But those airports' control tower systems need to be upgraded to add the ability to send last-minute changes to PDCs digitally, rather than by voice. That is the change that will reach 56 of these towers by the end of 2016, if the roll-out stays on schedule.</p>
<p>There is no question that digital PDCs save time and reduce errors, compared with voice communication by radio. And those benefits will be far greater when controller-pilot data-link (CPDLC) is rolled out to the FAA's 20 en-route centers. Unfortunately, that is not scheduled to happen until 2021. Meanwhile, Nav Canada has implemented en-route CPDLC nationwide and across the North Atlantic.</p>
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<p><strong><a name="e"></a>Delivery Drones and Air Traffic Control</strong></p>
<p>After a very slow start, the safety regulatory side of FAA has recently accelerated its efforts to enable large-scale testing of small unmanned aerial systems (UASs). Spurred on especially by the efforts of Amazon and Google to develop "delivery drones," FAA this spring has approved nearly 500 small UAS operators under a section of the law that allows it to waive normal airworthiness requirements for "low-risk" operations. It has also given approved operators the authority to fly their UASs anywhere in the country below 200 ft., except within restricted airspace, near airports, or in major cities. And these operations are still limited to daylight and line-of-site control by the operator.</p>
<p>But getting to the kind of large-scale drone delivery services that both Amazon and Google envision will require far more than that. It will need some form of air traffic control in low-altitude airspace where radar coverage is problematic. Leading the way on looking into this is NASA Ames Research Center, conveniently located in Silicon Valley. Its largest known project in this area is a joint effort with Verizon to explore the use of cell towers for communications and surveillance of low-altitude UASs. Initial testing is planned for this summer, according to a June 3<sup>rd</sup> article in <em>The Guardian</em>. The publication obtained documents about the agreement via a Freedom of Information Act inquiry. NASA Ames held a workshop last fall, inviting industry participation and cost-sharing. Of the telecom companies attending, only Verizon stepped forward. It is the country's largest cell tower operator (with 12-15,000 of them) and has the most extensive 4G network.</p>
<p><em>The Guardian</em> also reported that NASA Ames has also signed contracts with Amazon ($1.8 million) and Google ($450,000) to test their UAS delivery drones at Ames. NASA will organize the field trials and will conduct "mishap investigations," as needed, according to what <em>The Guardian</em> learned from the contracts. &nbsp;</p>
<p>There is certainly potential for delivery drones, but I'm amazed at the lack of critical scrutiny of some of the hype being put forth by Google, in particular. <em>Aviation Week</em> recently interviewed Dave Vos, head of Google's Project Wing, who suggests a near-term future in which people summon a drone via smartphone, and 5 minutes later a UAS shows up with a cold beer. As reported without comment by Graham Warwick, Vos "cites other examples, from delivering a burger to the park, snake-bite antidote to a hiking trail, a forgotten passport to the airport"&mdash;all kinds of things that could make UASs "part of our daily lives." Google's vision, Warwick reports, "is a system that will deliver small packages anywhere within a 5-mile radius within 5 minutes of placing an order, excluding preparation time . . . within 5 years."</p>
<p>That vision strikes me as very problematic. I once arrived at LAX for a trip to Europe with what turned out to be an expired passport. My current passport was in a drawer in my office at home. Fortunately, my girlfriend (now my wife) had a key to the house, and was able to drive there, retrieve the passport, and bring it to me at LAX. But since passports are normally kept under lock and key, how is a delivery drone supposed to retrieve it? Likewise, anything that could be delivered within a 5-mile radius (ignoring 5 minutes for now) requires a delivery center that stocks a huge number of items. Does Google envision blanketing every large metro area with such delivery centers? Amazon's current logistics model depends on a growing number of massive delivery centers at strategic locations around the country, but there are only about 50 of them, not even one for each of the 100 largest urbanized areas.</p>
<p>So excuse me if I take projections of a billion-dollar near-term drone delivery market with a few large grains of salt.</p>
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<p><strong><a name="f"></a>FAA Forecast Numbers Turn Up, Slightly</strong></p>
<p>The FAA released its annual Aerospace Forecast several months ago, and it projects slightly faster aviation growth than previous forecasts. That may be surprising, because for the past decade or so, each year's 20-year forecast has been more rosy than the actual recent growth (or lack of same) that occurred. It always seemed to be a case of "robust aviation growth is just around the corner"&mdash;only aviation never seemed to reach that corner. But with last year's figures turning up for airlines, at least, this year's forecast may be closer to reality than those of previous years.</p>
<p>My interest is primarily in projected growth in ATC activity, which FAA projects separately for Towers, TRACONs, and Centers. In each case, this is broken down by user category: airlines, air taxi, general (&amp; business) aviation, and military. Overall projected Tower activity growth from 2014 to 2035 is 0.9%/year, with a 2.7% annual airline growth rate offsetting a decline in air taxi operations, modest 0.4% annual GA growth, and zero military growth.</p>
<p>Growth in TRACON activity is projected to average 1.1%/year, with a similar pattern of high airline growth offsetting declines or very slow growth in other sectors. Likewise for Center flight activity, with 1.5% annual growth overall, with airlines again setting the pace.</p>
<p>A couple of caveats are worth noting. First, whereas all previous forecasts since 2000 have used that year as the starting point for historical data, this year's forecast uses 2001, when air traffic was depressed in the aftermath of the 2001 terrorist attacks. This makes any comparison of end-year (2035) traffic look like higher growth from the historical starting year, compared with using high-activity 2000. If you dig out 2000 figures and compare them with the projections for 2035, you will find that there is overall growth only in Center activity; Tower activity in 2035 is projected to be <em>12.7% less</em> than occurred in 2000, and TRACON activity <em>11.2% less</em>.</p>
<p>Second, this year's forecast includes an Appendix B on "FAA Forecast Accuracy." It notes that numbers in FAA's forecast depend on underlying factors such as projections of GDP, passenger enplanements, and similar parameters developed by others. A table compares the mean absolute percent error of five such factors (over periods of one to five years) with the forecasts' projection of center traffic. In every case but one, the center traffic percent error was significantly greater than the error in the underlying factors, and the errors were all in the direction of overly optimistic forecasts.</p>
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<p><strong><a name="g"></a>Upcoming Event</strong></p>
<p><span style="text-decoration: underline;">Air Traffic Control: Symposium on Organizational Reform Options,</span> Transportation Research Board, July 7, 2015, National Academy of Sciences Building, Washington, DC. (Robert Poole speaking). Details at: <a href="http://www.trb.org/PolicyStudies/Blank6.aspx">http://www.trb.org/PolicyStudies/Blank6.aspx</a>.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="h"></a>News Notes</strong></p>
<p><em><span style="text-decoration: underline;">Aviation Week</span></em><span style="text-decoration: underline;"> Guest Editorial</span>. My favorite aviation publication, <em>Aviation Week &amp; Space Technology</em>, last month invited me to write a guest editorial on ATC reform. My piece, titled "Culture is Key to Aviation Reform," appeared in the magazine's May 25/June 7 issue. It is posted at the Reason.org website: <a href="http://reason.org/news/show/culture-is-key-to-fixing-air-traffi">http://reason.org/news/show/culture-is-key-to-fixing-air-traffi</a>.</p>
<p><span style="text-decoration: underline;">Aireon Signs Agreement with Airways New Zealand</span>. Continuing a slew of agreements with ANSPs around the globe, space-based ADS-B provider Aireon announced on June 15 a Memorandum of Understanding with Airways New Zealand. Under its terms, the two organizations will investigate the deployment of space-based ADS-B in New Zealand's domestic and oceanic airspace. Airways New Zealand's two flight information regions comprise 30 million square kilometers of airspace.</p>
<p><span style="text-decoration: underline;">Shared Services Definition Under Way in Europe</span>. The European Commission has awarded funding for projects to define the best models for providing two Europe-wide ATC support services: Pan-European Network Services (PENS) and Data Link Services (DLS). Eurocontrol and the A6 Alliance (comprising six large ANSPs) will carry out both studies, with A6 member NATS in the lead on PENS and DFS heading up DLS. Shared services are intended to yield economies of scale in providing such services to all ANSPs that are part of the Single European Sky effort.</p>
<p><span style="text-decoration: underline;">Nav Canada and Airports Group Collaborate on Public Engagement</span>. The Canadian Airports Council and Nav Canada this month announced a protocol aimed at improved consultations with communities affected by changes in flight paths for airport approaches and departures. The "Airspace Change Communications and Consultation Protocol" is intended to improve dialogue and consideration of community noise issues in the design of new flight paths, according to Nav Canada CEO John Crichton. The protocol was developed by the two organizations, with inputs from airlines, at the request of Transport Minister Lisa Raitt.</p>
<p><span style="text-decoration: underline;">TV Signals Tested as Alternative to Radar</span>. A two-year demonstration project carried out in the U.K. by the British ANSP NATS and contractors Thales ATM UK and Roke Manor tested whether ordinary television broadcast signals could be used to track aircraft in flight in the same way as radar. As reported by CANSO (June 10, 2015), both trials&mdash;one over London and a second over Liverpool&mdash;are considered successful, with specialized receivers able to track airborne targets in the same way as primary radar. Assuming further work validates the concept, the implications could be profound: a possible back-up for GPS, or a possible replacement for spectrum-hogging primary radar. But this, of course, assumes that broadcast television continues in the future.</p>
<p><span style="text-decoration: underline;">Paper Flight Strips Remain with ERAM</span>. In a good overview (<em>Airspace</em>, Quarter 2, 2015) of the excellent collaboration among developer Lockheed Martin, controllers, and technicians that led to the implementation of the new software ERAM at all 20 en-route centers, ATO Chief Operating Officer Teri Bristol used as one of her illustrations that "ERAM was producing paper flight strips in a format that some terminal facilities did not find helpful. We made changes so that the flight strips would look more like the ones produced by the previous automation system." To be sure, ERAM is a major improvement over the obsolete HOST system it replaced. But retaining paper flight strips? And bragging about it? Give me a break!</p>
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<p><strong><a name="i"></a>Quotable Quotes</strong></p>
<p>"I was up last week visiting [Nav Canada] in Ottawa, and looking at their technical center. And the unique thing they do is that they have a true collaboration from the position of developing their next-gen technology. They have the air traffic controller, the engineer, and the manufacturer working together from the conceptual state all the way through to training, implementation, and deployment within their facilities. And what that does is it saves time and money. And they actually are developing probably the best equipment out there, and they are selling it around the world. And they are doing it in a 30-month to three-year time frame, when we have to look much longer down the road because of our procurement process in this country."<br /> &mdash;Paul Rinaldi, President of NATCA, during Q&amp;A portion of Senate Commerce Committee hearing on air traffic control, May 20, 2015</p>
<p>"With an FAA reauthorization bill due in September, Bill Shuster (R, PA), the House transportation committee chairman, says the time is ripe for a structural overhaul. The centerpiece would be to spin air traffic control off to a new corporate entity outside of the FAA, leaving the agency to concentrate on its safety-regulation role. Other countries, such as Canada and Britain have taken that approach, the main virtue of which would be to get politics out of the funding of air traffic control operations and the NextGen upgrade. The proposed corporation would instead levy charges on the system's various users according to presumably more objective, business-like criteria. At least that's the theory&mdash;and it's a good one. . . . That doesn't mean, however, that the various interests involved&mdash;unionized controllers, private-jet owners, rural airports&mdash;won't continue to argue about who should pay for what, and how much. As long as those conflicts can be settled within the board of the proposed new corporation, well and good. If a new structure leaves stakeholders free to take their grievances to Congress, however, there won't be much point to it. FAA reform is a worthy and, possibly, attainable goal. Actually achieving better governance, though, will depend on getting the details right."<br /> &mdash;Editorial Board, "Revamping the FAA," <em>The Washington Post</em>, May 20, 2015</p>
<p>"Beginning with New Zealand in 1987, dozens of countries have opted for a model that separates air traffic management from government aviation roles like ensuring safety. Whether they truly privatized air traffic control (ATC) or 'corporatized' it, the arm's length from government bureaucracies and political tinkering has led to more financial stability, technological nimbleness, and responsiveness to the needs of airspace users. Even ICAO, the U.N.'s ever-cautious International Civil Aviation Organization, recommends that countries 'consider the establishment of autonomous entities to operate air navigation services.' . . . The devil may be in the details, to be sure. Airports, for example, will scream if the Airport Improvement Program funding mechanism were to fall by the wayside as user fees replace ticket taxes. But moving decidedly toward an independent entity for air traffic management is the right direction for the U.S. to go."<br /> &mdash;Editorial Board, "Get Moving on ATC Reform," <em>Aviation Week &amp; Space Technology</em>, May 25-June 7, 2015</p>
<p>"While it may be true that having both provision and safety regulation of a given service housed together may bring some efficiencies, there is little evidence for this claim and substantial international consensus on the potential for conflict of interest when it comes to ATC. This conflict of interest has been apparent in the U.S. for decades, and internationally measures have been taken to attempt to solve it by removing ATC provision from safety regulation. A recent MITRE study suggests that not only did such separation outside the U.S. not bring any harm, but in fact it proved quite successful in bringing a better culture of safety for everyone involved."<br /> &mdash;Jeff Davis, "ETW Issue Overview: Separating ATC Provision from Safety Regulation," <em>Eno Transportation Weekly</em>, 21 May 2015&nbsp;&nbsp;&nbsp;</p>
<p><a href="#top">&raquo; return to top</a></p>1014293@http://www.reason.orgThu, 25 Jun 2015 20:53:00 EDTbob.poole@reason.org (Robert Poole)Annual Privatization Report 2015http://www.reason.org/news/show/annual-privatization-report-2015
<p>Now in its 28th year of publication, Reason Foundation's <em>Annual Privatization Report</em>&nbsp;is the world's longest running and most comprehensive report on privatization news, developments and trends.</p>
<p><em>Annual Privatization Report 2015</em>&nbsp;details the latest on privatization and government reform initiatives at all levels of government. The individual sections include:</p>
<ul>
<li><a href="http://reason.org/news/show/apr-2015-state-privatization" target="_blank">State Government Privatization</a></li>
<li><a href="http://reason.org/news/show/apr-2015-federal-privatization" target="_blank">Federal Government Privatization</a></li>
<li><a href="http://reason.org/news/show/apr-2015-education" target="_blank">Education</a></li>
<li><a href="http://reason.org/news/show/apr-2015-air-transportation" target="_blank">Air Transportation</a></li>
<li><a href="http://reason.org/news/show/apr-2015-surface-transportation" target="_blank">Surface Transportation</a></li>
<li><a href="http://reason.org/news/show/apr-2015-transportation-finance" target="_blank">Transportation Finance</a></li>
<li><a href="http://reason.org/news/show/apr-2015-criminal-justice" target="_blank">Criminal Justice and Corrections</a></li>
</ul>
<p>Additionally,&nbsp;in May&nbsp;2015 Reason Foundation announced that&nbsp;Purdue University President and former two-term Indiana Governor Mitch Daniels is the recipient of the&nbsp;inaugural Savas Award for Public-Private Partnerships, a new award&nbsp;recognizing an individual or organization whose actions improved the cost-effective provision of public services through partnerships with private organizations. More information about the 2015 Savas Award for Public-Private Partnerships is <a href="http://reason.org/news/show/savas-award-2015-privatization">available here</a>.</p>
<p>Your comments on <em>Annual Privatization Report 2015</em> are important to us. Please feel free to contact us with questions, suggestions or for more information. For the most up-to-date information on the rapidly changing privatization world, please visit Reason's <a href="/areas/topic/privatization">privatization research archive</a>, and sign up for our monthly <a href="http://reason.org/newsletters/privgovreform/">Privatization &amp; Government Reform Newsletter</a>.</p>
<p>Leonard C. Gilroy, Editor<br />Director of Government Reform, Reason Foundation<br /><a href="mailto:leonard.gilroy&#64;reason.org">leonard.gilroy&#64;reason.org</a></p>1014235@http://www.reason.orgMon, 08 Jun 2015 09:00:00 EDTleonard.gilroy@reason.org (Leonard Gilroy)Culture Is Key to Fixing Air Traffic Controlhttp://www.reason.org/news/show/culture-is-key-to-fixing-air-traffi
Aviation Week <p>In the current debate on air traffic control reform, just about everyone agrees that uncertain and unstable funding is a problem that must be fixed. The Air Traffic Organization is in triage mode, trading off rising payroll costs, facility maintenance and replacement, and technology modernization within a dire federal budget context. But just coming up with more funding could end up making matters worse.</p>
<p>Despite significant reforms enacted by previous Congresses&mdash;personnel reform, procurement reform, and creating the Air Traffic Organization&mdash;today&rsquo;s Government Accountability Office (GAO) and Inspector General reports document the same problems of poorly specified projects, late delivery, and large-scale cost overruns that we saw in the 1980s, 1990s, and 2000s. Pumping more money into a seriously flawed system would amount to &ldquo;feeding the beast.&rdquo;</p>
<p>One major problem is a dysfunctional governance system, which the Mineta Commission characterized as &ldquo;too many cooks.&rdquo; Top Air Traffic Organization (ATO) and Federal Aviation Administration (FAA) managers spend enormous amounts of time responding to reports and directives from the GAO, the Inspector General, the Department of Transportation Secretary, the Office of Management &amp; Budget, six congressional committees, and ultimately 535 members of Congress. The end result is that the ATO&rsquo;s de-facto customer is the government, not the users of the National Airspace System.</p>
<p>But the largest&mdash;and least-discussed&mdash;problem is the ATO&rsquo;s status-quo organizational culture. The National Research Council&rsquo;s May 1<sup>st</sup> report on NextGen is devastating. The NRC&rsquo;s expert committee found that NextGen has morphed from a transformation of how air traffic is managed into a $40 billion equipment replacement bonanza. While that may be great for contractors, it is far from clear that&mdash;as presently pursued&mdash;there is a serious business case for aviation customers in $40 billion of new hardware without fundamental change in the air traffic control (ATC) system&rsquo;s concept of operations.</p>
<p>The key question is why this kind of thing continues to happen. The NRC experts put the blame on the FAA&rsquo;s &ldquo;conservative safety culture,&rdquo; which they find &ldquo;can affect how quickly process and technological change can happen.&rdquo; This kind of &ldquo;conservatism will understandably bias the agency away from innovation.&rdquo; Among the <em>risks</em> of this kind of culture is &ldquo;the opportunity cost of not deploying improved (and potentially even safer) technologies and procedures.&rdquo;</p>
<p>In a 2014 study commissioned by the Hudson Institute, I examined how the ATO is dealing with seven examples of disruptive changes in ATC: controller-pilot data link, GPS-based landing systems, GPS-based surveillance to replace radar, performance based navigation, real-time aviation weather, remote towers, and facility consolidation. All seven are potential breakthroughs in ATC performance and cost-effectiveness, but each faces a difficult way forward at the ATO (despite good intentions). By contrast, each of these is making greater headway in the hands of corporatized air navigation service providers in other countries. One of the most dramatic comparisons is the inability of the ATO to invest in space-based ADS-B provider Aireon, or even (thus far) to sign up as a customer, in contrast to Nav Canada&rsquo;s role as both lead investor and launch customer.</p>
<p>Again, the question is <em>why</em>. There are many knowledgeable, dedicated people at FAA and in the ATO, but as David Osborne wrote during the Clinton Administration&rsquo;s efforts to corporatize ATC (a corporation called USATS), expecting the FAA to excel at running a 24/7 high-tech service business is &ldquo;a bit like putting a Ferrari engine in a dump truck body and still expecting it to win races.&rdquo; But it&rsquo;s not just that the ATO is trapped within a tax-funded government bureaucracy. Because the ATO is embedded in a very conservative <em>safety regulatory agency</em>, its organizational culture is basically the same&mdash;risk-averse and status-quo oriented.</p>
<p>Consider where all the innovative ideas and technology come from. Boeing, Exelis, Honeywell, Saab Sensis and their counterparts think outside the box and are far more imaginative than FAA about how air traffic management can be transformed. But anything they propose is subject to arm&rsquo;s-length safety regulation by the FAA. The kind of creative tension that exists between industry and FAA does not&mdash;and cannot&mdash;exist between FAA and ATO as long as the ATO is embedded within the safety regulator organization.</p>
<p>Therefore, a <em>necessary</em> condition for fixing the culture problem is to pull the ATO out of FAA, to be regulated at arm&rsquo;s length. Organizational separation removes an inherent (self-regulation) conflict of interest and has been International Civil Aviation Organization (ICAO) policy since 2001. It is also the practice of every developed country other than ours. And since major air navigation service providers have been separated and corporatized in recent decades, their safety record has improved compared to the status quo ante.</p>
<p>But separation alone will not suffice to change the culture. A free-standing ATO also needs basic governance and funding reforms. The &ldquo;too many cooks&rdquo; problem stems directly from the fact that the ATO today is spending <em>taxpayers&rsquo; money</em>. Of course Congress and GAO and the Inspector General and Office of Management &amp; Budget must oversee and micro-manage, to see that taxpayer funds are not wasted. But if the new ATO shifts to the global, ICAO-blessed practice of charging users directly for its services, it&rsquo;s those users whose money will be spent. Those users should then be the ones making key policy decisions and holding ATO management responsible for results. Governance needs to be the responsibility of a stakeholder board.</p>
<p>As a self-supporting non-profit corporate entity, the new ATO would also be freed from federal procurement and civil service regulations. It could hire and properly compensate top-notch program managers, engineers, and software experts&mdash;and hold them accountable for results. That would further the change in organizational culture, as we have seen in air navigation service providers such as DFS, NATS, and Nav Canada since they were corporatized.</p>
<p>Funding, governance, and culture: all three need to be fixed. But the greatest of these is culture.</p>
<p><em>Robert Poole is director of transportation at Reason Foundation. This article originally appeared at&nbsp;<a href="http://aviationweek.com/">Aviation Week</a>.</em></p>1014270@http://www.reason.orgFri, 05 Jun 2015 10:30:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #123http://www.reason.org/news/show/air-traffic-control-newsletter-123
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">NRC on anti-innovation ATC culture</a></li>
<li><a href="#b">Evidence on arm's-length safety regulation</a></li>
<li><span class="SpellE"><a href="#c">Eno</a></span><a href="#c"> report calls for ATC corporation</a></li>
<li><a href="#d">Would an ATC corporation be constitutional?</a></li>
<li><a href="#e">FAA's dire FY 2016 budget</a></li>
<li><a href="#f">GAO on aircraft cybersecurity vulnerability</a></li>
<li><a href="#g">Upcoming Event</a></li>
<li><a href="#h">News Notes</a></li>
<li><a href="#i">Quotable Quotes</a></li>
</ul>
<p><strong><a name="a"></a>NRC Slams FAA's Anti-Innovation Culture</strong></p>
<p>In what the <em>Washington Post</em> called "the most scathing criticism to date for the pace of [FAA's] efforts," an expert committee appointed by the National Research Council has concluded that the FAA is not delivering anything like the original <span class="SpellE">NextGen</span> vision. "<span class="SpellE">NextGen</span> as currently planned will not have significant amounts of new automation (as was envisioned by the early JPDO [the Joint Program Development Office charged with coming up with what became <span class="SpellE">NextGen</span>])," the experts concluded. The report continues, "New technologies under consideration imply changed operations to realize large value, . . . the FAA has not addressed this." And, "Although some technologies and/or systems will be new, in most cases current plans call for them to be used in a way nearly identical to existing capabilities."</p>
<p>While acknowledging the importance of replacing aging facilities and obsolete technologies, the committee found that <span class="SpellE">NextGen</span> is not "broadly transformational. . . . And thus it is not an implementation of the early JPDO vision. . . . Many of the specific goals described in early JPDO discussions, such as free flight or air traffic control based on predefined 4-D flight trajectories, to enable global optimization of the airspace, will not come to fruition in the foreseeable future." Achieving such goals would require full deployment of advanced technologies, using those capabilities to support higher levels of automation, full equipage of nearly all aircraft and widespread revision of procedures. "Most important, however, they will await the organizational will to modify the human roles and responsibilities of the participants in the NAS."&nbsp;</p>
<p>The committee concludes that, in effect, aviation stakeholders have been misled, and unless there are major changes in the status quo, they should adjust their expectations downward, because "<span class="SpellE">NextGen</span> has become a misnomer."</p>
<p>This report reinforces my view that the ATC system's problems go far beyond insufficient and unstable funding. They require major changes in both governance and organizational culture. In discussing resistance to changing traditional ATC roles, the committee notes that "a conservative safety culture that makes changes to procedures slow and expensive," combined with both limited resources and inability to implement widespread change, has "stalled efforts to make the fundamental changes to the concept of operations that the JPDO envisioned."</p>
<p>Discussing this point in more detail, the report delves into FAA's organizational culture:</p>
<blockquote>
<p>"The FAA and the United States rightly pride themselves on a devotion to safety and an excellent safety record to match. At the same time, a conservative safety culture can affect how quickly process and technological change can happen&mdash;a challenge in an arena where technologies change rapidly. Such a culture may inhibit the adoption of new technologies or increased automation that could potentially result in net improvements in both safety and efficiency. . . . [I]f the FAA is going to be held accountable for an extremely conservative safety culture&mdash;which has historically been the case&mdash;then it should be recognized that such conservatism will understandably bias the agency away from innovation. Thus, there are risks associated with a safety culture as well, not least of which are the opportunity costs due to not deploying improved (and potentially even safer) technologies and procedures in the long run."</p>
</blockquote>
<p>That risk-averse organizational culture is built into the DNA of the Air Traffic Organization because it is in the DNA of the FAA itself. That may be appropriate for the FAA as aviation safety regulator, but it is counter-productive in a 24/7 high technology business charged with operating and improving the infrastructure on which all U.S. aviation depends. That is why a precondition for changing the ATO's anti-innovation culture is separating it from its safety regulator&mdash;just as Boeing, <span class="SpellE">Exelis</span>, Honeywell, and all the other aviation technology innovators are at arm's length from the FAA safety regulator.</p>
<p>Putting the ATO at arm's length from FAA, while necessary, is not sufficient to change its culture. It needs to be entirely outside of government, freed from the constraints of civil service so that it can recruit, properly compensate, and hold accountable for results top-notch program managers, engineers, and software people. It needs to be reoriented from constantly having to respond to oversight and micromanagement from 535 members of Congress, GAO, OIG, OMB, etc. and instead be directly accountable to a board of directors consisting of its aviation stakeholders. To deliver value to its customers, it needs to be able to make <em>business decisions</em> about which facilities to replace, consolidate, or shut down. And of course it needs to be paid directly by its customers for the services they receive, just as airports, railroads, and electric utilities are.</p>
<p>That is the case for ATC restructuring in a nutshell, and we are all indebted to the National Research Council for helping to make the case. (National Research Council, <em>A Review of the Next Generation Air Transportation System: Implications and Importance of System Architecture</em>, May 1, 2015)</p>
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<p><strong><a name="b"></a>What Happens After ATC Is Separated from Safety Regulation?</strong></p>
<p>It's understandable that some in aviation consider the idea of separating the ATO from the FAA as a kind of leap into the unknown, with possible negative consequences for air safety. The fact that such separation has been ICAO policy since 2001, and that more than 50 countries have each corporatized their ATC provider by separating it from the transport ministry that now regulates it at arm's length, does not seem to have had much of an impact on those fears.</p>
<p>So I was pleased to learn that last summer the FAA itself asked MITRE Corporation to investigate six cases in which developed western nations made this transition. The six countries are Australia, Canada, France, Germany, New Zealand, and the United Kingdom. All six ANSPs are technologically sophisticated. Four have major oceanic airspace responsibilities, and all have at least some dense air traffic in the vicinity of major cities. The task given MITRE researchers was to document what happened to the safety regulator after the transition&mdash;governance, autonomy, structure, and funding&mdash;as well as lessons learned.</p>
<p>MITRE's blandly titled "CAA International Structures" is dated October 2014. Its major findings are summarized in the initial 10 pages, followed by six appendices, describing each country's transition in more detail. You can read it yourself at: <a href="https://www.mitre.org/sites/default/files/publications/pr-15-0859-caa-international-structures.pdf">https://www.mitre.org/sites/default/files/publications/pr-15-0859-caa-international-structures.pdf</a>.</p>
<p>MITRE found that most of the civil aeronautics authorities (CAAs) are funded primarily from payments made by users, rather than taxes. This frees the safety regulator from reliance on the government's budget. It also makes it vulnerable to downturns in funding due to reduced flying during recessions. But it also makes the aviation stakeholders more directly aware of the costs of the regulatory agency. Four of the six (all except France and Germany) have shifted "from a compliance-based model to a risk-based model" of air safety regulation&mdash;meaning that instead of enforcing prescriptive standards with equal vigor on everyone, they focus more attention on those that appear to pose greater than average safety risks. This proved to be a difficult culture shift, but so far "there is no evidence that a risk-based approach is less safe than a compliance-based one." All the CAAs except the U.K.'s remained government organizations, and the latter was converted into a nonprofit corporation. Most CAAs also carry out an array of functions in addition to air safety regulation.</p>
<p>The longest discussion deals with separation of the ANSPs from the CAAs. As an overall conclusion, the MITRE team found that "In all cases, the separation of the ANSP from its CAA was reasonably successful. . . . There are no cases where ANSP separation was reversed, and MITRE did not discover any views that the system prior to separation was preferred." Moreover, "The collective experience after separating the ANSP from its CAA is quite good. . . . Despite the many approaches to organizing the CAA and the ANSP, in each case the safety record of the ANSP was equal to, or better than, the record prior to the separation."</p>
<p>Scalability is another issue discussed by the MITRE team, since that question has been raised by some stakeholders regarding the applicability of overseas ANSP reforms to the much larger United States. "During discussions with the CAAs, MITRE asked if there were any issues associated with the separation of the ANSP that would prevent scaling their CAA and regulatory systems to the size and complexity of the U.S. NAS. They could not think of any, but were quick to point out that their airspace was quite different from the U.S."</p>
<p>Finally, "The CAAs we interviewed were unanimous in stating that the separation of the CAA from air traffic service provision was worth it. Among the benefits they expressed were an increased focus on safety by the Regulator and the ANSP, improved efficiency of the ANSP, reduction in total cost to users, and improved participation by aviation stakeholders."</p>
<p>This report is an important contribution to the ongoing discussion of U.S. ATC restructuring.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><span class="SpellE"><strong><a name="c"></a>Eno</strong></span><strong> Report Calls for ATC Corporation</strong></p>
<p>For the past year and a half, I have represented Reason Foundation as a member of the <span class="SpellE">Eno</span> Center for Transportation's <span class="SpellE">NextGen</span> Working Group. Almost every month, I've racked up frequent flyer miles to and from Washington, to take part in working sessions, with nearly all aviation stakeholders participating. This week, the Working Group's final report was released, coinciding with the Senate Commerce Committee hearing at which the group's co-chair, former Sen. Byron Dorgan (D, ND), testified.</p>
<p>Besides providing a historical overview of U.S. air traffic control and its problems, the report includes six case studies of overseas ANSPs&mdash;government corporations in Australia, Germany, and New Zealand, a self-supporting ANSP within government (France), a for-profit public-private partnership (U.K.), and a nonprofit, stakeholder-governed corporation (Canada).</p>
<p>While those portions are important and well-done, the real meat of the report is Part 3, which analyzes four alternatives for U.S. ATC reform: a government corporation, a nonprofit corporation, a for-profit private corporation, and funding reform within the current structure. The latter two are rejected&mdash;the for-profit corporation for presenting some unique problems and having no stakeholder support, and the funding-reform-only approach for not addressing enough of the problems that need to be solved.</p>
<p>The discussion of the remaining two wisely notes differences between how government corporations overseas are often set up (as real businesses incorporated under corporate law, with significant autonomy) and typical U.S. government corporations such as Amtrak, the Postal Service, and the TVA. Weighing this realistic view against the statement of principles adopted previously by the Working Group, it finds both promise and limitations with this alternative. A similar analysis of the nonprofit, stakeholder-governed corporation finds only one extant example&mdash;<span class="SpellE">Nav</span> Canada&mdash;and judges that this would be a more drastic change than converting the ATO into a government corporation.&nbsp; In part because there are genuine trade-offs between the two, and in part because getting a consensus on one or the other among that diverse group of stakeholders would likely have been impossible, the report leaves it to the reader to weigh the pros and cons of each.</p>
<p>You can download the full report at <a href="http://www.enotrans.org/projects/nextgen-working-group">http://www.enotrans.org/projects/nextgen-working-group</a>.</p>
<p>Included on the home page is a list of members that agreed to be listed, along with co-chairs, former DOT Secretary Jim <span class="SpellE">Burnley</span> and former Sen. Byron Dorgan. Listed participants include 13 organizations and nine individuals, most of whose names you will recognize. The organizations include the Aerospace Industries Association, Business Roundtable, U.S. Chamber of Commerce, and U.S. Travel Association; two airlines (Alaska and American); Boeing; two airline associations (A4A and IATA); the Aircraft Owners &amp; Pilots Association (AOPA), Reason Foundation; and two unions&mdash;ALPA and NATCA. Several other stakeholder groups attended some of the meetings and took an active part in Working Group discussions, but apparently did not agree with enough of the report to be listed.</p>
<p><span class="SpellE">Eno</span> deserves our thanks for conceiving this project and providing logistical support for it over many months of spirited discussion and large amounts of time volunteered by Working Group members. The report is an important contribution to the much-needed conversation on fixing what's wrong with our ATC system.</p>
<p><a href="#top">&raquo; return to top</a></p>
<p><strong><a name="d"></a>Would an ATC Corporation Be Constitutional?</strong></p>
<p>Rep. Peter DeFazio (D, OR) is the ranking member of the House Transportation &amp; Infrastructure Committee. Despite discussions with a number of knowledgeable people, he is not yet persuaded than an ATC corporation is the right solution for America's ATC problems. So he asked the Congressional Research Service to look into whether such a corporation would be constitutional. Those questions would probably not arise with a government corporation, but DeFazio gave CRS an earlier version of the nine-page Term Sheet developed by the Business Roundtable's advisory group on ATC reform. The term sheet lays out a specific proposal for a non-profit, federally chartered ATC corporation governed by a stakeholder board&mdash;basically, a U.S. adaptation of the <span class="SpellE">Nav</span> Canada model.</p>
<p>The CRS analysis, dated April 10<sup>th</sup>, was produced by a legal analyst whose name has been redacted from the copy in circulation. It briefly summarizes the Term Sheet's proposal, but inserts a definition of primary responsibilities footnoted as having been provided by DeFazio's office&mdash;and therein lies a basic flaw in the analysis. Those inserted sections assert that the corporation's primary responsibilities will include "establishing air traffic control procedures similar to those currently existing in FAA Order JO7110.65V," along with issuing instructions to pilots, implementing modernization programs, reporting violations to FAA, and taking part in international forums such as ICAO.</p>
<p>The inserted words within the quotation marks above provide the main rationale for the CRS finding that there may be constitutional concerns. Those words, if taken literally, would mean that the corporation itself would be establishing the rules of the air, which would run afoul of the legal principle that Congress cannot delegate legislative or regulatory authority to a private entity. <em>The Term Sheet says no such thing</em>, nor are ATC corporatization proposals intended to do that. The whole idea of separating ATC safety regulation from operation of the ATC system is to retain in government the power to make the regulations, with the corporation authorized to operate the system in compliance with current and future Federal Air Regulations (FARs).</p>
<p>The unnamed CRS analyst agrees that case law certainly allows for a private entity to propose new regulations, new flight procedures, and the adoption of new technologies (such as equipage with a new ATC technology). All the valuable work of RTCA's <span class="SpellE">NextGen</span> Advisory Committee (NAC) would be irrelevant unless the law permitted such carefully worked out advice to FAA on what stakeholders think makes sense. The ATC corporation would play a similar role, hopefully making proposals that would speed up the routine use of curved RNP approaches, 4-D trajectories, etc.&mdash;but the final yes or no decisions would still be up to the FAA as safety regulator.</p>
<p>The report raises other concerns under the headings of Due Process (would the Corporation's stakeholder board be coercing members who lose a vote over fees or equipage) and over whether the board members could be appointed by stakeholders instead of the President. The legal ins and outs here will require careful analysis, not my amateur non-lawyer speculations. But the report concludes with an escape hatch, recognizing a way out. "In many ways, the evaluation of whether the Corporation exercises 'significant authority' is analogous to whether it exercises 'regulatory authority.' To the extent that the Corporation is subject to significant FAA oversight; is limited to advising the FAA; or acting in a ministerial manner to implement FAA standards, it is unlikely to be exercising significant authority. Thus, a reviewing court is unlikely to consider the exercise of such authority by the Corporation to be an infringement on executive power."</p>
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<p><strong><a name="e"></a>FAA's Dire FY 2016 Budget</strong></p>
<p>I watched part of the Senate Commerce Committee hearing on ATC reform, and was dismayed to hear that at least one witness and a number of Senators seem to think Congress can or will pull a funding rabbit out of some hat that will solve our ATC problems. Earth to Senators: there is a sequester going on.</p>
<p>The House Appropriations Committee approved the FY 2016 budget for the Department of Transportation and the Department of Housing &amp; Urban Development (affectionately known as the THUD bill). Given overall budget limits, the total allowed for THUD was $55.1 billion. The portion allocated to FAA is $15.854 billion, which is 0.8% less than the actual budget for FY 2015 (which we're in now). The line item for FAA Facilities &amp; Equipment is $2.5 billion, 3.8% less than 2015 and the <em>lowest total in 15 years</em>. In the horse-trading that went on over amendments, a Republican measure to spend $25 million more on the Washington Metro was approved, offset by a $22 million cut in <em>FAA overhead</em>. Such are the ways of Congress, which is why so many stakeholders want to get <span class="SpellE">NextGen</span> and the rest of the Air Traffic Organization out of the federal budget and made self-supported from fees for ATC services.</p>
<p>To be sure, this is not the last word on the FAA budget. The THUD bill must be approved by the full House, and must then be reconciled with whatever DOT budget the Senate passes. Still, there is no sign here of a new infusion of funding into an FAA forced to make trade-offs among salaries, new technology, and refurbishing decrepit facilities.</p>
<p>One other trend worth noting is the "general fund contribution" to the FAA budget, long defended by general aviation and others as reflecting the general benefits of aviation to the U.S. economy, etc. Although it has averaged 23% of the budget over the past 15 years, not many have noticed its sharp downward trend since FY 2013. After hitting what seemed like a low of 17% in 2014, it plunged to 7.2% in 2015, and is just 6.4% in the budget approved by House appropriators last week. This trend suggests that the aviation community needs to start thinking about how to pay for the FAA's non-ATC functions with something other than a disappearing general fund contribution.</p>
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<p><strong><a name="f"></a>GAO Report and <em>Wired</em> Story on Aircraft Cybersecurity Vulnerability</strong></p>
<p>When I first read the recent <em>Wired</em> article in which hacker Chris Roberts (now under FBI investigation) claimed that he had hacked into airliner inflight entertainment systems&mdash;and from there into the flight management system in the cockpit&mdash;I dismissed this as highly unlikely. Who would design or install a passenger entertainment system that could provide an electronic pathway into critical safety-of-flight systems? And who would approve such systems?</p>
<p>But then I belatedly read GAO-15-370, "FAA Needs More Comprehensive Approaches to Address Cybersecurity as Agency Transitions to <span class="SpellE">NextGen</span>," released April 14, 2015. There I learned, as John Croft summarized in <em>Aviation Daily</em> (May 2<sup>nd</sup>), that "the threat of intrusion is increasing as aircraft cockpits and the cabin share Internet Protocol (IP) connectivity, primarily through information systems connected to both the cockpit avionics and the inflight entertainment systems." Oh-oh. Four cybersecurity experts told GAO investigators that "because firewalls are software components, they could be hacked like any other software and circumvented." The report says that when the cabin and cockpit systems use the same physical wiring harness or router and both use the same IP platform, they could be vulnerable. Specifically, "A user could subvert the firewall and access the cockpit avionics system from the cabin," according to one of GAO's experts. Hence, "Internet connectivity in the cabin should be considered a direct link between the aircraft and the outside world, which includes potential malicious actors."</p>
<p>The report goes on to criticize FAA for not taking cybersecurity seriously enough. Its Office of Safety (AVS) certifies new interconnected systems on an aircraft-specific basis, but started developing rules for certifying the cybersecurity of all new aircraft systems in 2013. It stopped work on that last year after deciding that it needed more outside input. In December FAA authorized an aviation rule-making committee (ARC) to study the issue and report back by May 2016.</p>
<p>That was before hacker Chris Roberts surfaced, claiming that he has hacked into the systems on board 737s, 757s, and A320s for the past several years, and is seeking to alert airlines and the FAA to their cybersecurity vulnerabilities. It's frightening to think that he may have actually done what he claims to have done&mdash;including gaining access to an engine thrust control. It might be prudent for the FAA to insist on recommendations a lot sooner than May of next year.</p>
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<p><strong><a name="g"></a>Upcoming Event</strong></p>
<p><span style="text-decoration: underline;">Air Traffic Control: Symposium on Organizational Reform Options,</span> Transportation Research Board, July 7, 2015, National Academy of Sciences Building, Washington, DC. (Robert Poole speaking). Details at: <a href="http://www.trb.org/PolicyStudies/Blank6.aspx">http://www.trb.org/PolicyStudies/Blank6.aspx</a>.</p>
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<p><strong><a name="h"></a>News Notes</strong></p>
<p><span class="SpellE"><span style="text-decoration: underline;">Aireon</span></span><span style="text-decoration: underline;"> Signs More Memoranda of Agreement</span>. Space-based global ADS-B provider <span class="SpellE">Aireon</span> has announced two additional Memoranda of Agreement with ANSPs. <span class="SpellE">Aireon</span> will work with the Civil Aviation Authority of Singapore to define requirements and procedures for using its services in the Singapore Flight Information Region, including portions where there is no radar surveillance. <span class="SpellE">Aireon</span> has also signed a MOA with the Blue Med Functional Airspace Block, representing the ANSPs of Cyprus, Greece, Italy, and Malta, to assess the implementation of space-based ADS-B surveillance in their Mediterranean airspace.</p>
<p><span style="text-decoration: underline;">Cat. III GBAS Expected by 2018</span>. FAA announced last month that it expects to approve Category III <span class="SpellE">autoland</span> capability for GPS-based landing systems in the United States by 2018. At this point, the only FAA certified Ground-Based Augmentation System (GBAS) is Honeywell's <span class="SpellE">Smartpath</span>, in service at Houston and Newark (as well as Boeing's Moses Lake, WA airport test center). Delta and United are both using the systems at Houston and Newark for approved Cat. I landings, and have equipped significant portions of their Boeing fleets. Overseas airlines using the IAH and EWR approaches include British Airways, Emirates, and Lufthansa, with Virgin Atlantic, Air Berlin, Swiss Air, and Qantas among those purchasing GBAS-equipped aircraft. Honeywell has also completed initial flight demonstrations of GBAS at Shanghai <span class="SpellE">Pudong</span> International Airport.</p>
<p><span style="text-decoration: underline;">UAV Collision Avoidance Testing in Europe</span>. A Mid Air Collision Avoidance System (MIDCAS) for UAVs (aka drones) has been tested in Italy, under a project of the European Defense Agency, supported by 11 companies from five countries. MIDCAS uses detect-and-avoid sensors with full authority over the UAV's flight control system. It flew a series of avoidance maneuvers on a Sky-Y UAV that was put on collision courses with manned aircraft on test flights from an air base in Italy. The project has also conducted simulations of how MIDCAS could operate within civil air traffic management systems.</p>
<p><span style="text-decoration: underline;">Four ANSPs Working on Common Controller Work Station</span>. The ANSPs of Germany, the Netherlands, Spain, and the U.K. have agreed to work together on developing specifications for their next-generation controller work position (CWP). The design phase is expected to take two years. Having a common CWP will make it easier for controllers to migrate from one ANSP to another, just as pilots certified on Airbus or Boeing planes can easily move from one airline to another. In the shorter term, shared development will spread the costs over a larger number of entities.</p>
<p><span style="text-decoration: underline;">Hultgren Bill Would Revamp FAA's Controller Hiring Process</span>. Rep. Randy Hultgren (R, IL) last month introduced, with bipartisan co-sponsors, the Air Traffic Controllers Hiring Act of 2015. If enacted, it would un-do the FAA's 2014 hiring process, which requires all candidates to first pass a "Biographical Questionnaire" and gives no advantage to graduates with college majors in air traffic control, via the FAA-promoted Collegiate Training Initiative. The bill would restore preferred status for CTI graduates, eliminate use of the Biographical Questionnaire, and allow candidates who have aged out from the 2014 hiring process, or who did not pass the BQ, to re-apply.</p>
<p><span class="SpellE"><span style="text-decoration: underline;">Frequentis</span></span><span style="text-decoration: underline;"> Steps Up Remote Tower Business</span>. Europe-based <span class="SpellE">Frequentis</span> has signed a cooperation agreement with the German Aerospace Center DLR to commercialize DLR remote tower technologies. Like our own NASA, DLR promotes technology transfer from its research efforts to industry. <span class="SpellE">Frequentis</span> VP <span class="SpellE">Hannu</span> <span class="SpellE">Juurakko</span> told <em>Air Traffic Management</em> that the company is in a unique position to become a one-stop shop for a complete virtual tower solution.</p>
<p><span style="text-decoration: underline;">Lockheed Martin and CSC Win DUATS II Contracts</span>. As part of its ongoing revamp of Flight Services (flight plan filings, weather briefings, and other services to private pilots), FAA put out for new bids its online service called DUATS (Direct User Access Terminal Service), provided until now by competing providers CSC and DTC. The competition resulted in Lockheed Martin and CSC as the winning providers. The contracts are for one year, with up to four possible one-year extensions. Lockheed Martin continues to operate the FAA's Flight Service Stations under contract.</p>
<p><span style="text-decoration: underline;">FAA Announces ERAM Completion</span>. On April 30<sup>th</sup> the FAA announced that its new En-Route Automation System is operational at all 20 domestic en-route centers. Its predecessor, the ancient Host computer system, was finally shut down nationwide. Many years late and nearly $400 million over budget, ERAM's lengthy development illustrates ongoing problems in FAA procurement, but is a welcome milestone in modernization. Though conceived before <span class="SpellE">NextGen</span>, it will serve as a platform for making use of information generated by <span class="SpellE">NextGen</span> capabilities such as ADS-B.</p>
<p><span style="text-decoration: underline;">NATS CEO Steps Down</span>. Richard <span class="SpellE">Deakin</span>, the CEO of the corporatized ANSP of the U.K., NATS for the past five years, has stepped down. NATS said the decision was "by mutual consent," since the company is entering a new five-year price-cap regime and embarking on a new phase in the EU's Single European Sky effort. Operations director Martin Rolfe will step in as interim CEO while NATS conducts an internal and external search process.</p>
<p><span style="text-decoration: underline;">ICAO Commercialization Research Available Online</span>. The International Civil Aviation Organization several years ago did case studies on the corporatization and/or privatization of airports and air traffic control in 26 countries. They are all available on the ICAO website. Go to: <a href="http://www.icao.int/sustainability/pages/Eap_ER_Databases_CaseStudies_ANSPs.aspx">http://www.icao.int/sustainability/pages/Eap_ER_Databases_CaseStudies_ANSPs.aspx</a>.</p>
<p><span style="text-decoration: underline;">IBM Study on ATC Corporatization Available Online</span>. "Reforming the Federal Aviation Administration: Lessons from Canada and the United Kingdom," was commissioned last decade by the IBM Center for the Business of Government. Its authors are Professors Clinton V. Oster and John S. Strong, co-authors of the outstanding book on the global ANSP revolution, <em>Managing the Skies</em>. The report is online at: <a href="http://www.businessofgovernment.org/report/reforming-federal-aviation-administration-lessons-canada-and-united-kingdom">www.businessofgovernment.org/report/reforming-federal-aviation-administration-lessons-canada-and-united-kingdom</a>.</p>
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<p><strong><a name="i"></a>Quotable Quotes</strong></p>
<p>"Managing ATC has always been an odd fit for FAA. It makes the agency a key service provider for a commercial air transport system that it also regulates, creating an inevitable conflict of interest. It also means ATC gets roped into the annual congressional appropriations process, making it difficult, for example, to get a steady, long-term financial commitment to deploying the satellite-based <span class="SpellE">NextGen</span> ATC system. 'Many stakeholders have understandably lost confidence in FAA's ability to modernize,' [Chairman] Shuster has pointed out. . . . Will this be a year of genuine, radical restructuring of FAA that creates a separate <span class="SpellE">Nav</span> Canada-like entity to manage ATC? The debate will begin in earnest soon; this will likely be the overwhelming aviation policy issue on Capitol Hill this summer."<br /> &mdash;Editorial, "Foxx 'Open' to FAA Restructuring," <em>Air Transport World</em>, April 30, 2015</p>
<p>"Unfortunately, neither business leaders nor the flying public can take the future health of U.S. aviation for granted. Challenges with the FAA's provision of air traffic control services have existed for decades, but are now becoming more acute. FAA has failed to keep its equipment modernized for the entirety of its history, including during times of budgetary plenty. Our national air traffic control system relies on essentially the same technology&mdash;ground-based radar and voice radio transmission&mdash;as it did in the 1960s. FAA is operating <span class="SpellE">enroute</span> centers that are mostly over 50 years old. Almost all of the FAA's surveillance technology is still analog. . . . The fact that the FAA has been consistently behind when it comes to innovation isn't just an inconvenience&mdash;it has real costs for the users of the airspace and the public at large. . . . In the end, I believe the greatest risk to our system is allowing the status quo to continue, or pursuing more half-measures and calling them reform. We've been down that path. We cannot allow the fear of change to prevent us from doing what is needed."<br /> &mdash;Gov. John <span class="SpellE">Engler</span>, President, Business Roundtable, testimony before the Senate Commerce Committee, May 19, 2015</p>
<p>"Transitioning from a government organization to a private company is a serious undertaking. Some difficulty is reduced if the private company is not motivated by profit. There is no best time to do it other than now. The sensible way to approach the issue initially is to leave alone or encourage activities that are going well and to intervene in those areas that can be improved without real risk. The operation of the system itself is safe, effective, and is an essential service that operates 24/7. It is operated by dedicated professionals and should not be touched. New PBN activities, for example, should be encouraged and accelerated. On the other hand, intervention in overhead functions and acquisition should be started immediately. It will take a while to establish a self-sustaining organization in a changed direction, but benefits will accrue immediately and increase as the process progresses."<br /> &mdash;John Crichton, CEO, <span class="SpellE">Nav</span> Canada, "U.S. ATC Reform Issues Raised," March 25, 2015</p>
<p>"If airlines really knew how much trauma (e.g., NOTAMs and outages) and unnecessary high cost (e.g., ILS flight inspection and approach light installation, operation, and maintenance) was associated with ILS, compared to the vastly better and less expensive GLS [GBAS], and especially if airlines had to pay the 'fully allocated cost' for today's ILS's, then the entire global airline community switch to GLS would start nearly immediately, likely with a major portion of the transition completed in less than 5 to 7 years, with full ROI payback. It is nothing short of a multi-national governmental disgrace that GLS-equipped aircraft are having to delay a full decade to fully use their already certified and functioning GLSs for Cat. III minima service. Each airline should be sending a 'bill' to [Administrator] Michael Huerta for reimbursement of a decade's worth of wasted airborne systems investment."<br /> &mdash;Recently retired air transport test pilot and former flight standards official, private email, May 20, 2015 (used by permission)</p>
<p><a href="#top">&raquo; return to top</a></p>1014258@http://www.reason.orgThu, 21 May 2015 21:18:00 EDTbob.poole@reason.org (Robert Poole)It's Time for Congress to Separate Air Traffic Control From the FAAhttp://www.reason.org/news/show/its-time-for-congress-to-separate-a
Orange County Register <p>In March, more than six million passengers passed through Los Angeles International Airport, and John Wayne Airport handled over 832,000 passengers. The uptick in passengers and flights at Southern California&rsquo;s airports comes at a crucial time in the aviation industry.</p>
<p>Every four or five years, Congress has to &ldquo;reauthorize&rdquo; the Federal Aviation Administration and the aviation user taxes that fund the air traffic control system and about $3.5 billion a year in grants given to local airports.</p>
<p>This reauthorization process is different. Long-needed, sweeping transformations are being discussed that would separate the air traffic control system from the FAA itself, setting up an air traffic control organization as a self-supporting entity that would be regulated for air travel by the FAA, just as airlines and airports are.</p>
<p>Transforming the air traffic system would fix several long-running problems. The first is funding. Recent years of sequester and partial government shutdowns have led most in the aviation industry to agree that uncertain, unstable funding is unacceptable for a vital service such as air traffic control.</p>
<p>The second problem is governance. The Department of Transportation, the Office of Management and Budget, the Government Accountability Office and the U.S.Congress are just some of the groups making demands on FAA. As a result, the air traffic control system wastes a lot of time and attention to satisfy those &ldquo;customers&rdquo; rather than dedicating resources to where they should be focused &ndash; on the flying customers using the services of the air traffic control system.</p>
<p>The third problem is dysfunctional organizational culture. As one veteran observer told me, 10 people can say "no" for every one that is empowered to say &ldquo;yes&rdquo; to air traffic changes. This negative culture is part of the reason that the U.S. air traffic system lags behind its corporatized counterparts overseas in actually implementing the systems and procedures envisioned in NextGen, the long-delayed and over-budget modernization plan aimed at replacing outdated radar systems with GPS-based landing systems and other upgrades.</p>
<p>An air traffic control system funded directly by aviation passengers will be a lot more responsive than the current system that begs Congress for funding. That means the oversight of how those funds are spent can shift from myriad governmental entities to a governing board made up of stakeholders in the aviation industry. This kind of funding reform directly enables governance reform.</p>
<p>Air traffic control&rsquo;s risk-averse, bureaucratic culture stems, in part, from the fact it&rsquo;s embedded within the FAA, a government regulatory agency &ndash; not an organization equipped to deal with today&rsquo;s changing technology.</p>
<p>Congress is seriously considering creating a self-supporting air traffic control entity funded directly by aviation customers, governed by a board representing those customers and other key stakeholders, and regulated at arm's length by the FAA. This change has been needed for decades and would be great news for Southern California&rsquo;s travelers, airports and economy.</p>
<p><em>Robert Poole is director of transportation at Reason Foundation. This article originally appeared in the <a href="http://www.ocregister.com/articles/air-660823-traffic-control.html">Orange County Register</a>.</em></p>1014253@http://www.reason.orgFri, 15 May 2015 11:32:00 EDTbob.poole@reason.org (Robert Poole)Privatization of Airports, Air Traffic Control and Airport Securityhttp://www.reason.org/news/show/apr-2015-air-transportation
Annual Privatization Report 2015 <p>The&nbsp;<em>Air Transportation</em>&nbsp;section of Reason Foundation's&nbsp;<a href="http://reason.org/news/show/annual-privatization-report-2015"><em>Annual Privatization Report 2015</em></a>&nbsp;provides an overview of the latest on privatization and public-private partnerships in air transportation. Subsections include:</p>
<p style="padding-left: 30px;">A. Airport Privatization</p>
<p style="padding-left: 30px;">B. U.S. Airport Security</p>
<p style="padding-left: 30px;">C. Air Traffic Control</p>
<p>&raquo; <a href="http://reason.org/files/apr-2015-air-transportation.pdf"><strong><em>Annual Privatization Report 2015: Air Transportation</em></strong></a> [pdf, 1.5 MB]</p>
<p>&raquo; Complete <a href="http://reason.org/news/show/annual-privatization-report-2015"><strong><em>Annual Privatization Report 2015</em></strong></a></p>1014239@http://www.reason.orgThu, 14 May 2015 09:00:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Reform Is Not Just About Fundinghttp://www.reason.org/blog/show/air-traffic-control-reform-is-not-j
<p>The aviation community is debating fundamental restructuring of the air traffic control system. Those who portray the problem as simply unstable and inadequate funding would leave major problems unresolved&mdash;problems of governance and of culture. Those two problems share the blame for the Federal Aviation Administration&rsquo;s chronic difficulties in delivering new technologies and procedures, and shutting down obsolete facilities and equipment.</p>
<p>Here is how the three problems are linked together. The FAA&rsquo;s Air Traffic Organization (ATO) is a high-tech 24/7 service business trapped inside a federal regulatory bureaucracy. Its organizational culture is highly status-quo oriented, in sharp contrast to the innovative, entrepreneurial corporate cultures of the Boeings and Honeywells of the world. They continually innovate, but are prevented from making risky trade-offs by arm&rsquo;s-length safety regulation by the FAA.</p>
<p>Over the last two decades, more than 60 air traffic control (ATC) providers in other countries have been separated from their government safety regulators, and set up as self-supporting corporate entities regulated at arm&rsquo;s length for safety. This is not only commonsense, good-government policy; it is also the recommended practice of the International Civil Aviation Organization. The USA is just about the only developed country that has failed to make this important policy change.</p>
<p>Besides shifting to arm&rsquo;s-length safety regulation, the other critically important change is one of governance. The ATO today reports to far too many overseers: the FAA Administrator, the Department of Transportation Secretary, the Office of Management &amp; Budget, the Government Accountability Office, the Department of Transportation Inspector, six congressional committees directly, and in practice all 535 members of Congress. Senior managers spend a very large fraction of their time responding to all those overseers rather than focusing on meeting the needs of their real customers: the people who fly planes using the ATC system.</p>
<p>It will be impossible to change this governance model as long as the ATO depends on tax money that must be authorized and appropriated each year by Congress. The 60 corporatized ATC providers get paid directly by their aviation customers. That insulates them completely from their governments&rsquo; budgets, and also enables them to issue revenue bonds based on their revenue stream, just as airports and public utilities do.</p>
<p>But user funding also means that governance properly shifts from the current array of agencies and legislators to the customers and other aviation stakeholders. A good example is the stakeholder board of directors of nonprofit Nav Canada, which includes board members representing airlines, business aviation, controllers, and other key stakeholders. Under the self-supporting ATC corporation model, the funds are no longer &ldquo;taxpayers&rsquo;money&rdquo;; they are provided instead by the customers. So it is the customers and other stakeholders, as members of the governing board, who provide the oversight.</p>
<p>Thus, the three key reforms Congress should enact are (1) to shift the funding from aviation taxes to direct fees for ATC services, (2) to remove the ATO from the FAA, to bring about arm&rsquo;s-length safety regulation, and (3) to entrust governance of the self-supporting ATO to a board of directors representing key ATC stakeholders.</p>1014229@http://www.reason.orgTue, 28 Apr 2015 13:23:00 EDTbob.poole@reason.org (Robert Poole)Air Traffic Control Newsletter #122http://www.reason.org/news/show/air-traffic-control-newsletter-122
<p><strong>In this issue:</strong></p>
<ul type="disc">
<li><a href="#a">What problem is ATC reform trying to solve?</a></li>
<li><a href="#b">Separating ATC from safety regulation</a></li>
<li><a href="#c">Government <span class="GramE">corporation</span> or nonprofit corporation?</a></li>
<li><a href="#d">What about service to rural and small-city airports?</a></li>
<li><a href="#e">Are overseas ANSP models scalable to the USA?</a></li>
<li><a href="#f">Why not a for-profit ATC corporation? </a></li>
<li><a href="#g">GPS backup back on the agenda</a></li>
<li><a href="#h">News Notes</a></li>
<li><a href="#i">Quotable Quotes</a></li>
</ul>
<p><strong>Editor's Note: </strong></p>
<p><em>Since last month's issue, both the House and Senate aviation subcommittees have held hearings on reform of the funding, governance, and structure of the air traffic control system. The prospect of sweeping reform, such as corporatizing the Air Traffic Organization, has raised a number of questions for debate and discussion. Accordingly, the majority of this issue is devoted to addressing some of the most important ones.</em></p>
<p><strong><a name="a"></a>What Problem Is ATC Reform Trying to Solve?</strong></p>
<p>In his April 14<sup>th</sup> testimony before the Senate's aviation subcommittee, FAA Administrator Michael Huerta <span class="GramE">acknowledged that</span> "there is talk about restructuring the FAA as part of this reauthorization. I am all for having that discussion, but . . . we need to be sure that any governance changes would work to solve the challenges faced by the FAA." When Commerce Committee chair Sen. John Thune (R, SD) asked him to clarify, Huerta <span class="GramE">replied that</span> "it is important to ask what exactly is the problem we are trying to solve."</p>
<p>In my testimony before the House aviation subcommittee several weeks before, I stressed that there are three interlinked problems that need to be solved. First is <strong>funding</strong>. Recent years of sequester and partial government <span class="GramE">shut-downs</span> have led almost everyone to agree that uncertain, unstable funding is unacceptable for a vital service such as air traffic control. And by not facilitating <span class="GramE">revenue-bond</span> financing of large capital programs (like airports use), it makes large-scale modernizations like <span class="SpellE">NextGen</span> and facility consolidation all the more difficult.</p>
<p>The second problem is <strong>governance</strong>. When I have talked with senior FAA people off the record, and former ATO officials more openly, they have been very candid that having to respond to the combined oversight of the DOT Secretary, the Office of Management &amp; Budget, the Government Accountability Office, the DOT Inspector General, and ultimately 535 members of Congress consumes an enormous amount of top management time. And that ends up focusing management attention on satisfying those "customers," rather than where it should be focused&mdash;on the customers using the services of the ATC system.</p>
<p>The third problem&mdash;much less discussed&mdash;is the ATO's dysfunctional organizational <strong>culture</strong>. Compared with the innovation that keeps bubbling up in the Boeings and <span class="SpellE">Honeywells</span> of the world, the ATO is highly <span class="GramE">status-quo</span> oriented, and has an organizational/management structure that, as one veteran observer told me, empowers 10 people to say "no" for every one that can say "yes." This status-quo culture is part of the reason the U.S. ATC system lags behind its corporatized counterparts overseas in actually <em>implementing</em> the systems and procedures envisioned in <span class="SpellE">NextGen</span>, such as controller-pilot data link, replacing ILS with GPS-based landing systems, implementing RNP curved approaches, signing up for global space-based ADS-B, etc. (It also does not help that with civil service pay scales, the ATO has difficulty attracting and keeping high-performing engineers, software experts, and program managers.) My detailed assessment of this problem, commissioned by the Hudson Institute, is a 54-page report, "Organization and Innovation in Air Traffic Control." (<a href="http://reason.org/files/air_traffic_control_organization_innovation.pdf">http://reason.org/files/air_traffic_control_organization_innovation.pdf</a>)</p>
<p>The three problems are interlinked in a number of ways. Funding reform is needed not just to provide a more reliable basis for the ATO's capital and operating costs. If <span class="GramE">this is done by switching from aviation <em>taxes</em> to <em>ATC fees</em></span> paid directly to a self-supporting ATO, that changes the funds from <em>taxpayers' money</em> to the <em>ATO customers' money</em>. And that means the oversight of how those funds are spent can shift from myriad governmental entities to a governing board made up of stakeholders. This kind of funding reform directly enables governance reform.</p>
<p>My conclusion about the primary reason for the ATO's risk-averse, <span class="GramE">status-quo</span> culture is that the agency is embedded within a safety regulatory agency, which has shaped its culture. Therefore, a precondition for changing that culture is removing the ATO from the FAA, putting it at arm's length from the safety regulator, just as innovative Boeing and Honeywell (and every airline, and every FAA service contractor) are regulated at arm's length by the FAA. I discuss the safety consequences of this kind of separation of ANSP from air safety regulator in the article below.</p>
<p>Overall, three serious problems would be solved by converting the ATO into a self-supporting corporate entity, funded directly by its aviation customers, governed by a board representing those customers and other key stakeholders, and regulated at arm's length by the FAA. (My March 24<sup>th</sup> testimony is available at: <a href="http://reason.org/files/robert_poole_testimony_air_traffic_control.pdf">http://reason.org/files/robert_poole_testimony_air_traffic_control.pdf</a>&gt;.</p>
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<p><strong><a name="b"></a>Separating ATC from Safety Regulation</strong></p>
<p>In his Senate testimony, Administrator Huerta several times said that although all reform options are on the table, there "must be a tight linkage" between safety and <span class="GramE">modernized&nbsp; technology</span> and procedures. In recounting recent modest progress in implementing some <span class="SpellE">NextGen</span> features, he attributed the progress to the "tight nexus" between ATO operations, <span class="SpellE">NextGen</span> developers, and safety regulators. And he said he is "fearful" of any structure that "puts a wall" between those functions. That would clearly rule out separating the ATO from FAA, it seems to me.</p>
<p>The idea that ATC reform should keep safety regulation and the ATC provider together received an unexpected endorsement in the House testimony of Craig Fuller, speaking in his capacity as vice chairman of the new FAA Management Advisory Council that took office in January 2014. He presented a concept&mdash;not yet approved by the MAC (as eight general aviation stakeholder groups noted in a March 23<sup>rd</sup> letter to Fuller)&mdash;that would convert the entire FAA into a Federal Corporation governed by a stakeholder board. According to his testimony, this would avoid a "disruptive" separation of safety regulation from ATC and a long transition period.</p>
<p>This is not a new idea. Its roots date back to periodic calls for taking the FAA out of DOT, making it a free-standing agency directly answerable to Congress, rather than to the DOT Secretary. And back in 1986 the National Academy of Public Administration, reviewing an ATC corporation proposal from the Air Transport Association, recommended instead converting the entire FAA into a corporation.</p>
<p>But <span class="GramE">by the time of Vice President Gore's reinventing government effort in 1993-94, several self-supporting air navigation service providers (ANSPs) had been created by pulling the ATC function out of the government transport ministry</span>. Their example provided the basis for what became DOT Secretary Pena's 1994 U.S. Air Traffic Services Corporation (USATS) legislative proposal. The existing ATC system would be separated from the FAA and set up as a largely self-funded government corporation, with revenue-bond financing authority, governed by a stakeholder board. One of the key virtues cited by both <span class="GramE">Gore's</span> team and the two-volume USATS report was the separation of safety regulation from operations. Arm's-length safety regulation was viewed as a far wiser approach than the self-regulation inherent in the traditional FAA structure.</p>
<p>The main USATS report addressed the "FAA Corporation" idea as follows:</p>
<blockquote>
<p>"This model was perceived as less than optimal for several reasons. While there would have been benefits in keeping the FAA together as an organization, there was concern about establishing the safety regulatory and oversight functions outside the traditional government organization. There was also a concern that users, through Board membership, would have had some authority to oversee safety regulation. It was likely that a new safety oversight function would be required in DOT to oversee the corporation. There was also concern that the corporation's independence and flexibility, especially with regard to the ATC function, would have been greatly diminished by the fact that the CEO and Board would have been directly accountable to the Executive Branch and Congress for major portions of the organization's funding."</p>
</blockquote>
<p>The world has moved on since then. In 2001, the International Civil Aviation Organization (ICAO) revised its <em>Safety Oversight Manual</em> (Doc. 9734, Part A, Paragraph 2.4.9) to call for organizational separation of ANSPs from aviation safety regulators. And all 60 of the self-supporting ANSPs in operation today are regulated at arm's length by their government safety regulators. As Steve Van <span class="SpellE">Beek</span>, member of the FAA MAC (2011-2013) put it in has April 16<sup>th</sup> piece in <em>Aviation Week</em>, "Other nations and ICAO recognize that national regulatory agencies should focus on the provision of public goods such as regulation and safety, not delivering user services. These systems typically separate the air traffic provider from the regulator, protecting the interests of the public while enabling the efficiencies and access to capital of a commercialized provider."</p>
<p>But the ultimate answer regarding the impact of arm's-length separation on safety is empirical data. The first large-scale study of before/after performance by commercialized ANSPs came out in January 2006. Overall, it found that safety performance was either unchanged or (in most cases) improved in the years after corporatization. (<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1317450">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1317450</a>)</p>
<p>&nbsp;More recent data on three of the most relevant ANSPs finds the following:</p>
<ul type="disc">
<li><span class="SpellE"><span style="text-decoration: underline;">Nav</span></span><span style="text-decoration: underline;"> Canada</span>: the rate of losses of IFR separation per 100,000 aircraft movements declined by 58% between 1997 and 2012.</li>
<li><span style="text-decoration: underline;">NATS (U.K.)</span>: "<span class="SpellE">airproxes</span>" per 100,000 movements declined 77% between 2002 and 2012.</li>
<li><span style="text-decoration: underline;">DFS (Germany)</span>: "risk-bearing <span class="SpellE">airproxes</span>" per 100,000 movements declined 85% between 1996 and 2012.</li>
</ul>
<p>Those are long enough periods of time that if there were some kind of inherent defect in arm's- length safety regulation, it would have shown up by now.</p>
<p><strong><a name="c"></a>Government Corporation or Federally Chartered Non-profit Corporation?</strong></p>
<p>It is looking increasingly like the main alternatives for ATC restructuring will boil down to a government corporation versus a federally chartered non-profit corporation. Prototypical examples from overseas would be government corporations like DFS (Germany) and Airways New Zealand, on one hand, and not-for-profit, non-share capital corporation <span class="SpellE">Nav</span> Canada.</p>
<p>Of the aviation stakeholders testifying at the March 24<sup>th</sup> House hearing, Airlines for America (A4A) clearly favored the latter. As Douglas Parker said in his testimony, "Our work to date leads us to believe that a commercialized, non-profit type governance model would deliver the greatest benefits for a reformed ATC entity because such a structure would continue to put safety first, while driving value for all stakeholders." That was also the recommendation of former Air Traffic Organization Chief Operating Officer David Grizzle, speaking on behalf of the ATC reform project of the Business Roundtable. <span class="GramE">Controllers</span> union president Paul Rinaldi, while stressing that funding reform is NATCA's top priority, said that they are willing to consider any organizational alternative except a for-profit corporation.</p>
<p>Dorothy Robyn, who worked on the USATS proposal in the Clinton White House, told the House subcommittee that although she favored a government corporation at the time, she has subsequently concluded that a better alternative for this country is a non-profit corporation, chartered by Congress but outside the federal government altogether. She compared the two alternatives in a recent piece for the Brookings Institution. She points out that "Government corporations in the United States do not have the same degree of political insulation as those in other countries," citing the U.S. Postal Service, which despite being a nominally independent, self-supporting government corporation, has repeatedly had its business decisions (such as shutting down little-used post offices) thwarted by Congress. She concluded that the one ANSP that is outperforming all the others is non-profit <span class="SpellE">Nav</span> <span class="SpellE">Canada.Why</span>? "The reason is incentives: <span class="SpellE">Nav</span> Canada's basic organizational design&mdash;management by a stakeholder board that is dominated by the users themselves&mdash;creates an incentive for efficiency in the absence of competition and eliminates the incentive for monopoly abuse." (<a href="http://www.brookings.edu/blogs/fixgov/posts/2015/04/06-faa-user-cooperative-government-corporation-robyn">www.brookings.edu/blogs/fixgov/posts/2015/04/06-faa-user-cooperative-government-corporation-robyn</a>)</p>
<p>I agree with that conclusion. There are also many impediments to businesslike operation created by federal law and practice regarding government corporations. For example, the Treasury Department generally insists on control of their bond issuance. Their fees and charges must be based on costs, not value (which makes it impossible to charge low fees to users with limited ability to pay). Government corporation boards are made up of political appointees. And many must still contend with oversight by congressional committees, the GAO, and even OMB.</p>
<p>A nonprofit, non-governmental corporation does raise questions that would probably not arise in converting the ATO to a government corporation, such as liability, insurance, and valuing the assets so that the company can obtain full title (and thereby use them as collateral and/or dispose of those no longer needed). Those are not trivial issues, but they were all resolved in the case of <span class="SpellE">Nav</span> Canada, and they can likewise be resolved here, if the consensus is that a government corporation is unlikely to fully solve the ATO's underlying problems.</p>
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<p><strong><a name="d"></a>What About Service to Rural and Small-City Airports?</strong></p>
<p>A genuine concern of people and businesses in small cities and rural America is access to the national airspace system. If the inherently public governmental provider&mdash;the current ATO directly overseen by Congress&mdash;is transformed into a 24/7 high-tech service business, would small towers be shut down, and growing communities without towers be prevented from obtaining them?</p>
<p>Those who favor a nonprofit corporation approach, especially of the user co-op variety (i.e., with a broadly based stakeholder board), argue that while that might happen in a for-profit ATC corporation, it would not be likely in the non-profit corporation, especially if the enabling legislation made it clear that continuing such access is part of the company's mission.</p>
<p>Earlier this year it was alleged that after it started up, non-profit <span class="SpellE">Nav</span> Canada had reduced service to remote areas. I queried <span class="SpellE">Nav</span> Canada directly about this, and received a detailed listing of its facilities for the start-up years, 1996 through 1999. Over that four-year period, just one of its 44 control towers was closed (a part-time tower at North Bay) and replaced with a <span class="GramE">16 hours/</span>day flight service station (FSS). Four FSS's were closed over those four years, replaced by either a 24-hour Contract Weather Office (CWO) or a Community Aerodrome Radio Station (CARS) providing weather and airport conditions. Each also was provided with FISE RCO&mdash;Flight Information Service <span class="SpellE">Enroute</span> and Remote Communications Outlet. They permit IFR arrivals and departures at very low-volume airports. Thus, none of these previously served remote locations was left without access to airspace services, tailored to their actual volume.</p>
<p>Overall, <span class="SpellE">Nav</span> Canada tells me that there is <span class="GramE">more service today to more places than was provided by their predecessor, Transport Canada</span>.</p>
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<p><strong><a name="e"></a>Are Overseas ANSP Models "Scalable" to the United States?</strong></p>
<p>Probably the most common concern I've heard expressed in discussions of an ATC corporation is along the following lines. Sure, some of the overseas ANSPs have been very successful, but none of them has anywhere near the level or complexity of air traffic handled by our ATO. As Paul Rinaldi of NATCA observed in his House testimony, in 2012 there were 12 million flights in Canada compared with 132 million in the United States. There are 21 centers here, but just 7 there, and 315 towers here versus 42 there. And this country has 8 of the 10 busiest airports in the world, and 16 of the top 30. Canada has only one, Toronto, ranked 15<sup>th</sup> busiest.</p>
<p>Ihaven't checked those numbers, but their order of magnitude is certainly correct. <span class="GramE">But also irrelevant.</span> I asked former COO David Grizzle about this question, which he gets repeatedly. His answer was as follows:</p>
<blockquote>
<p>"The U.S. air traffic control system is already scaled. It already has more than 500 facilities, more than 14,000 controllers, more than 6,000 technicians, and more than 5,000 managers. What is the scale component they are looking at? The boards and senior management cadres are the same for $500 million organizations as they are for a $50 billion organization. It would be one thing if we were starting with the Canadian system and building it to serve the needs of the U.S. system. But the fact is that the U.S. system already exists, fully scaled. It just needs to be managed with a different set of principles and values. That particular activity does not present a scale issue."</p>
</blockquote>
<p>I also asked the question of John Crichton, CEO of <span class="SpellE">Nav</span> Canada. While agreeing on the much larger overall size of the U.S. system, he asked, "Does it really matter? What if California became a separate country with its own ATC system and had 10% of the traffic of the current U.S.? Would that change the nature of ATC in California or the rest of the U.S.? It would not."</p>
<p>On the question of airspace complexity, let me refer back to a series of reports produced jointly by <span class="SpellE">Eurocontrol</span> and the FAA, "Comparison of Air Traffic Management-Related Operational Performance: U.S./Europe." These reports focus on air traffic to and from the largest airports in the two regions. While the average number of daily IFR departures is larger for the 34 main U.S. airports than the 34 main European airports, the larger dozen or so EU airports exceed the number of departures at about one-third of the 34 U.S. airports. And maps in these reports comparing the density of IFR flight hours by center show that traffic density is just as great in Europe's core area (Benelux, northeast France, Germany, and Switzerland) as in the airspace of our Cleveland, Chicago, Indianapolis, and Atlanta centers.</p>
<p>Crichton puts it this way:</p>
<blockquote>
<p>"The U.S. ATC system is complex. Does that change the nature of the operation? The execution of the ATC function is done in sectors. Sectors are designed so that one controller or small group can execute the function without being overloaded. An approach control center in Toronto, Canada or London, England or <span class="SpellE">Langen</span>, Germany is configured and operated in a remarkably similar fashion to an approach control center in Atlanta. Each individual sector handles about the same amount of traffic. There are more <em>sectors</em> in the U.S. than elsewhere, but each sector operates in a functionally similar way. There are five busy airports in the London area. NATS claims that it is the most complex airspace in the world, with good reason. The U.S. ATC system is large and complex in aggregate, but is not different in nature than other busy, complex airspaces."</p>
</blockquote>
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<p><span class="GramE"><strong><a name="f"></a>Why Not a For-Profit ATC Corporation?</strong></span></p>
<p>At the March 24<sup>th</sup> House hearing, former Aviation Subcommittee chair Rep. John Mica (R, FL) passed out copies of a draft bill to transfer the ATO to a corporation based on an employee stock ownership (ESOP) plan. Mica has long championed ESOPs as a way to motivate the employees of a government service provider to accept transitioning it to the private sector. Mica asked those of us testifying that day to submit our comments on the bill by April 15<sup>th</sup>. I did so, recommending against this approach, but on April 16<sup>th</sup> we all saw headlines about Mica introducing his ATC ESOP privatization bill.</p>
<p>In my written comments, I noted that for the foreseeable future, ATC everywhere is and will be a monopoly (except for contractor-operated control towers). When a function is a monopoly, there must be some way to protect its customers from monopoly pricing and other possible abuses. The three principal alternatives are a for-profit company with an external regulatory agency (as with investor-owned utilities), a government corporation (which is presumed to operate in the public interest, such as municipal utilities), and a non-profit user co-op.</p>
<p>In air traffic control today, we have examples of all three. The large majority of ANSPs are government corporations, operated on a not-for-profit basis, with no regulation. The one partially private, for-profit ANSP is NATS, the U.K. provider. Accordingly, it has an external economic regulator that controls the rates it charges on its monopoly services. And we have one example of what amounts to a user co-op: not-for-profit, stakeholder-governed <span class="SpellE">Nav</span> Canada. It has no economic regulator, but does have statutory charging principles it must follow, with a right of appeal to the government if a customer group considers a rate charged to be in violation of the charging principles.</p>
<p>Utility regulation has a host of well-studied drawbacks, including a tendency to over-invest in costly facilities (to have a larger "rate base" against which to earn the allowed rate of return), and asymmetry of information between the regulator and the regulated company. I see no particular reason, therefore, to go the for-profit route, if there is a simpler way to get the right incentives. And with a considerable history of user co-ops in aviation (including the first U.S. air traffic control, set up by airline user co-op ARINC), that has long seemed to me to be the best model.</p>
<p>But it's also the case, as I pointed out in my brief, that nobody in the transportation research community or the aviation stakeholder community wants a for-profit ANSP. At the House hearing, NATCA's Paul Rinaldi was quoted in several news reports saying, "NATCA absolutely opposes any model that derives profit from air traffic control services. A profit-driven system . . . might cut services to rural communities because of the lack of returns for shareholders. A profit-driven system might also be an impediment to our general aviation sector, which is very sensitive to changes in services or increased costs."</p>
<p>Since you have to have a for-profit structure in order to have stock to use in an ESOP, but neither the employees nor other stakeholders want a for-profit structure, this appears to be a solution in search of a problem. But Mica is to be commended for being the first to actually offer a bill to corporatize the ATO.</p>
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<p><strong><a name="g"></a>GPS Backup Back on the Agenda</strong></p>
<p>It's been eight years since the government's Independent Assessment Team, at the request of DOD and DHS, recommended that the best overall backup approach for position, navigation, and timing (PNT) for all GPS users (not just aviation) would be to implement an enhanced version of the long-established Long Range Navigation system Loran, called <span class="SpellE"><em>eLoran</em></span>. In February 2008 DHS announced that it had accepted the recommendation and that <span class="SpellE">eLoran</span> would be developed and implemented. But for reasons that have never been explained, the incoming Obama administration failed to implement this decision and the Coast Guard began shutting down the legacy Loran system.</p>
<p>Other countries have gone ahead with <span class="SpellE">eLoran</span>, including South Korea (which is vulnerable to North Korean jamming). There is a U.K./Ireland project to protect maritime navigation at northern European ports, including a high-precision pilotage version at Rotterdam <span class="SpellE">Europort</span>. And another European project is under way to use signals from the EU's Galileo system over the Loran Data Channel to provide precise timing for telecommunications.</p>
<p>But the biggest news for U.S. readers is recent action in Congress to preserve the infrastructure of Loran-C for possible use as the platform for <span class="SpellE">eLoran</span> and its operation by a non-governmental commercial entity. And the bipartisan National Positioning, Navigation, and Timing <span class="SpellE">Resiliance</span> and Security Act of 2015, introduced by Rep. John Garamendi (D, CA), would require the Secretary of Defense to establish a reliable, land-based PNT system as a GPS backup. It calls for broadcasting <span class="SpellE">eLoran</span> signals from 19 towers across the country.</p>
<p>There is also a <em>Federal Register</em> notice, inviting public comment "regarding potential plans by the U.S. government to implement an enhanced Long Range Navigation (<span class="SpellE">eLoran</span>) system as a complementary positioning, navigation, and timing (PNT) capability." Comments are due on or before May 22, 2015. The docket number you need is DOT-OST-2015-0053.</p>
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<p><strong><a name="h"></a>News Notes</strong></p>
<p><span class="SpellE"><span style="text-decoration: underline;">Searidge</span></span><span style="text-decoration: underline;"> Scores Two Remote Tower Wins</span>. Canada's <span class="SpellE">Searidge</span> Technologies has announced contracts with two European ANSPs to set up remote tower centers. In a project funded by the SESAR Joint Undertaking, the ANSP of Italy&mdash;ENAV&mdash;will host a remote tower center at Milan <span class="SpellE">Malpensa</span> Airport that will provide <span class="GramE">night-time</span> tower services for Milan <span class="SpellE">Linate</span> Airport, as well as a virtual airport. The system will include real-time video, target tracking and positioning, and real-time data on a common platform. The second contract is with <span class="SpellE">HungaroControl</span>, the ANSP of Hungary. It will create a remote tower at Budapest Airport, served by a customized video wall and interfaced with an Advanced Surface Movement Guidance and Control System from <span class="SpellE">Indra</span> Navia.</p>
<p><span class="GramE"><span style="text-decoration: underline;">Australia Developing Fully Integrated Civil/Military ATC</span>.</span> ANSP <span class="SpellE">Airservices</span> Australia and the Royal Australian Air Force have selected Thales Australia to develop the country's next-generation ATC system, which will integrate all civil and military airspace and management&mdash;reportedly the first such system in the world. The new system, called <span class="SpellE">OneSky</span>, is scheduled for full implementation by 2018.</p>
<p><span class="GramE"><span style="text-decoration: underline;">FAA Awards Contracts for Contract Control Towers</span>.</span> On April 7<sup>th</sup>, the FAA announced new five-year contracts for all towers in the FAA contract tower (FCT) program. The three current contractors&mdash;Midwest ATC, RVA, and Serco&mdash;have retained most of the towers included in their previous contracts, with the only change being that Midwest will now manage Area 7 (Guam, four Hawaiian airports, and Saipan) instead of Serco.</p>
<p><span style="text-decoration: underline;">GBAS Selected for St. Helena Island</span>. The new airport on St. Helena, a British island territory in the South Atlantic, will be served by a Honeywell <span class="SpellE">Smartpath</span> Ground-Based Augmentation System (GBAS), which provides precision runway approaches by enhancing GPS satellite signals, instead of a traditional instrument landing system (ILS). The system is being installed this quarter, with navigation-aid calibration flights scheduled for July.</p>
<p><span class="GramE"><span style="text-decoration: underline;">FAA Extends Flight Service Station Contract</span>.</span> Lockheed Martin has received a contract extension of up to 42 months to continue managing the existing Automated Flight Service Station (AFSS) program. With ever-larger numbers of private pilots using online access for flight-plan filing, weather briefings, and other AFSS services, the FAA Air Traffic Organization is still working on its Future Flight Service Program. FFSP will likely replace the two existing contracts for online services as well as the AFSS contract with a single new contract sometime between now and 2019.</p>
<p><span style="text-decoration: underline;">Time-Based Separation Now Operational at Heathrow</span>. Traditional separation between flights in the landing queue uses a fixed distance, based on each plane's wake vortex characteristics (mostly a function of size and weight). But when there are strong headwinds, planes move more slowly over the ground, which reduces the number that can land per hour. The alternative is to space flights by time, using real-time data on headwinds. A time-based separation system, developed by NATS (the U.K. ANSP) and Lockheed Martin, went live at London Heathrow Airport last month. It is expected to cut <span class="GramE">headwind landing</span> delays in half.</p>
<p><span style="text-decoration: underline;">North Atlantic ATC Streamlined by NATS and <span class="SpellE">Nav</span> Canada</span>. The ANSPs of Canada and the UK have achieved two major milestones for the busy North Atlantic air routes, 90% of which are managed by these two providers. First, <span class="SpellE">Nav</span> Canada's Gander Automated ATC System (GAATS+) went live at the NATS Oceanic Control Center in Prestwick on Nov. <span class="GramE">24<sup>th</sup> .</span> That provides seamless ADS-B surveillance for these routes, which will lead to <span class="GramE">reduced</span> in-trail and lateral separation minima in coming years. And on Nov. 26<sup>th</sup>, the first digital messages were sent over the enhanced North Atlantic Common Coordination system. NACC now allows controllers in adjacent oceanic flight information regions (FIRs) to coordinate handoffs of flights from one FIR to the next digitally, rather than by voice.</p>
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<p><strong><a name="i"></a>Quotable Quotes</strong></p>
<p>"There is significant consensus about the basic problem: air traffic control is a massive, complex, technology-intensive service business operating within a conventional U.S. government <span class="GramE">bureaucracy.</span> . . . It is a bit like putting a Ferrari engine into a dump truck body and still expecting it to win races."<br /> &mdash;David Osborne, <em>The <span class="SpellE">Reinventor's</span> <span class="SpellE">Fieldbook</span></em>, <span class="SpellE">Jossey</span> Bass, 2000, p. 106</p>
<p>"Support is emerging for using this year's FAA reauthorization to address two pressing needs. First, where possible, remove the FAA's services from the federal budget process, where they are vulnerable to interruption. Second, modernize the provision of air traffic control and other services by separating them from the FAA, allowing the agency to focus on its key regulatory mission. Passage of an FAA reform effort would be the most sweeping and significant aviation policy reforms since 1978&mdash;when the Airline Deregulation Act became law."<br /> &mdash;Stephen D. Van <span class="SpellE">Beek</span>, "Opinion: The Time Is Now for Aviation Policy Reform," <em>Aviation Week</em>, April 16, 2015</p>
<p>"Our nation's air traffic control system has served us well for many years, but it is still based on equipment, concepts, and procedures that date back decades. In recent years the FAA has tried to modernize the system by moving to satellite navigation and more automation. But these efforts have cost many billions of dollars with not as much progress as we all would like to see. The Government Accountability Office and DOT's Inspector General have pointed out many shortcomings with respect to FAA's efforts to modernize our air traffic control system. Some of the problems seem to be deep rooted and cultural in nature. Nearly eight years ago the IG noted that implementing <span class="SpellE">NextGen</span> would be an extraordinarily complex, high-risk effort. That looks like a gross understatement, as we are still many years away from full implementation, with many more billions yet to be spent. Some have suggested that the current governance model for air traffic control is <span class="GramE">ill-suited</span> for <span class="SpellE">NextGen</span>. In that regard, I applaud Chairman Shuster, of the House Transportation and Infrastructure Committee, on his consideration of new approaches that may yield better results and deliver the promised benefits of <span class="SpellE">NextGen</span>."<br /> &mdash;Sen. John Thune, Chairman, Senate Commerce Committee, opening remarks at hearing on FAA Reauthorization, April 14, 2015</p>
<p>"Like it or not, it seems clear that the FAA&mdash;for a variety of reasons identified by numerous analysts including the DOT's Inspector General and the GAO&mdash;cannot and will not effectively implement <span class="SpellE">NextGen</span>. Thus, to seize the benefits <span class="SpellE">NextGen</span> offers, we need to take the ATO out of the FAA and create a self-supporting corporate entity to perform the ATC function. As you all know, this is not a very radical proposal since many other countries&mdash;including Canada, the UK, Australia, and others&mdash;have already taken similar steps."<br /> &mdash;Robert Crandall, 2015 "Sight" Lecture, Wings Club, Washington, DC, March 26, 2015</p>
<p>"A4A has undertaken considerable research on various models of air traffic organization around the world. In particular, we have done a thorough analysis to benchmark and assess the governance, financial, and operational performance of the U.S., Canadian, and European ATC models in order to make an informed comparison between our current system and those systems engaging in best practices outside the United States. Our evaluation reviewed the safety, predictability, efficiency, cost/productivity, customer service, and <span class="SpellE">NextGen</span> implementation performance of each of these organizations. That research leads us to the conclusion that to bring our ATC system to where it should be today and must be for the future, transformation, not renovation, is required."<br /> &mdash;Douglas Parker, CEO, American Airlines, "Air Traffic Reform (ATC) Solutions," Airlines for America testimony, House Aviation Subcommittee, March 24, 2015</p>
<p><a href="#top">&raquo; return to top</a></p>1014227@http://www.reason.orgWed, 22 Apr 2015 22:34:00 EDTbob.poole@reason.org (Robert Poole)Corporatizing the U.S. Air Traffic Control Systemhttp://www.reason.org/news/show/corporatizing-the-us-air-traffic-co
<p>My name is Robert Poole. I direct the transportation policy program at Reason Foundation, a nonprofit think tank with offices in Los Angeles and in Washington, DC. I&rsquo;m a graduate of MIT with two degrees in mechanical engineering. I have been studying the performance of the U.S. air traffic control system since before the 1981 controllers&rsquo; strike. Since the first air traffic control corporatization in 1987 (Airways New Zealand), I have followed the progress of this change in the structure, funding, and governance of the entities providing this vital service.&nbsp;</p>
<p>Broadly speaking, I agree with the assessments made by the Federal Aviation Administration Management Advisory Council in January 2014 and many others about the problems plaguing the FAA&rsquo;s Air Traffic Organization. These problems can be grouped into three categories:</p>
<ul>
<li><strong>Funding:</strong> uncertain, unstable, and poorly suited to paying for large-scale capital modernization programs such as NextGen.</li>
<li><strong>Governance:</strong> a system with so many legislative branch and executive branch overseers that it focuses Air Traffic Organization management attention far more on overseers than on the organization&rsquo;s aviation customers.</li>
<li><strong>Culture:</strong> an organizational culture that is very risk-averse and status-quo oriented.</li>
</ul>
<p>These problems are all inter-related, but since the culture problem has received less attention than the others, I will focus mostly on that in my testimony today. <br /> The five most detrimental aspects of organizational culture at the Air Traffic Organization are as follows:</p>
<ol>
<li>
<p><span style="text-decoration: underline;">Self-identity as a safety agency, rather than as a technology user.</span> This stems from the Air Traffic Organization being embedded within FAA, whose mission is safety. Nearly all the innovations relevant to NextGen come largely from the aerospace/avionics industry, which has a much more innovative, dynamic culture. All those companies are regulated at arm&rsquo;s length by FAA safety regulators&mdash;but the Air Traffic Organization is embedded inside the aviation safety regulation organization.</p>
</li>
<li>
<p><span style="text-decoration: underline;">Loss of technical expertise.</span> Partly due to its status-quo culture and partly due to civil service pay scales, the FAA has a chronic problem with not attracting or not being able to retain the best engineers and software professionals. This means that a lot of the detailed requirements for new systems end up being defined by contractors, which can lead to costly additions that make the systems more complex than is needed and more costly than necessary.</p>
</li>
<li>
<p><span style="text-decoration: underline;">Loss of management expertise.</span> For the same reasons that FAA has limited technical expertise, it also has trouble attracting and keeping top-notch program managers who are used to being held accountable for results.</p>
</li>
<li>
<p><span style="text-decoration: underline;">Excessive oversight.</span> Inherent in being a large government agency that is spending taxpayers&rsquo; money, the FAA must be held accountable to all the normal government overseers. The Air Traffic Organization must respond to oversight by the FAA Administrator, the DOT Secretary, the DOT Inspector General, the Office of Management &amp; Budget, the Government Accountability Office, and up to 535 Members of Congress. Responding to all these overseers takes up a large amount of senior management time.</p>
</li>
<li>
<p><span style="text-decoration: underline;">Lack of customer focus.</span> Because the Air Traffic Organization gets its funding from Congress, it ends up&mdash;de-facto&mdash;acting as if its customer is Congress, rather than the aviation customers it is set up to serve.</p>
</li>
</ol>
<p>When I compared this set of problems with what I have observed over the past 15 years in corporatized air navigation service providers, the remedies appeared to be fairly straightforward.</p>
<p><a href="http://reason.org/files/robert_poole_testimony_air_traffic_control.pdf">Continue Reading the Full Testimony (.pdf)</a></p>1014201@http://www.reason.orgTue, 24 Mar 2015 17:30:00 EDTbob.poole@reason.org (Robert Poole)